<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 7, 1996
U.S. Home Corporation
(Exact name of registrant as specified in its charter)
Delaware 1-5899 21-0718930
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1800 West Loop South, Houston, Texas 77027
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 877-2311
Not Applicable
(Former name or former address, if changed since last report.)
<PAGE> 2
Item 5. Other Events.
On November 7, 1996, the Board of Directors (the "Board
of Directors") of U.S. Home Corporation (the "Company") declared a dividend
distribution of one preferred stock purchase right ("Right") for each
outstanding share of the Company's Common Stock, $.01 par value per share
("Common Stock"), and each outstanding share of the Company's Convertible
Redeemable Preferred Stock, $.10 par value per share (the "Convertible
Preferred Stock" and, collectively with the Common Stock, the "Stock"),
held by stockholders of record on December 4, 1996. Each Right, when it
becomes exercisable, entitles the registered holder to purchase from the
Company at any time following the Distribution Date (as defined below) and
prior to the occurrence of a Triggering Event (as defined below) a unit
consisting of one one-hundredth of a share (a "Unit") of the Company's
Series A Junior Non-Cumulative Preferred Stock, $.10 par value per share
(the "Preferred Stock"), at a price of $80.00 per Unit, subject to
adjustment (the "Purchase Price"). The description and terms of the Rights
are set forth in a Rights Agreement, dated as of November 7, 1996 (the
"Rights Agreement"), between the Company and First Chicago Trust Company of
New York, as Rights Agent.
Until the earlier to occur of (i) 10 days after the date
on which there is a public announcement that (a) a person or group of
affiliated or associated persons (other than a person who is and continues
at all times to be eligible under Rule 13d-1 under the Securities Exchange
Act of 1934 as in effect on the date of the Rights Agreement to file a
Schedule 13G with respect to its ownership of the Common Stock (an
"Institutional Stockholder")) has acquired, or has the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of Common
Stock or (b) an Institutional Stockholder, including its affiliates and
associates, has acquired or has the right to acquire beneficial ownership
of 20% or more of the outstanding shares of Common Stock (any person
described in clause (a) or (b) being referred to as an "Acquiring Person"),
or (ii) 10 business days (or such later date as the Board of Directors
shall determine prior to such time as any person or group of affiliated
persons becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender or exchange offer the
consummation of which would result in a person or group of affiliated
persons beneficially owning 15% or more of the then outstanding shares of
Common Stock (including any such date which is after the date of the Rights
Agreement and prior to the issuance of the Rights; the earlier of such
dates being called the "Distribution Date"), the Rights, with respect to
any share of Stock outstanding as of the Record Date, will be attached to
the certificate for such Stock and no separate Rights Certificates (as
defined below) will be distributed.
Until the Distribution Date (or earlier redemption or
expiration of the Rights), (i) the Rights will be transferred with and only
with the shares of Stock, (ii) new Stock certificates issued after the
Record Date upon transfer or issuance of Stock will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
<PAGE> 3
transfer of any certificates for Stock outstanding will also constitute the
transfer of the Rights associated with the Stock represented by such
certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Rights Certificates") will be
mailed to holders of record of the Stock as of the close of business on the
Distribution Date and such separate Rights Certificates alone will
represent the Rights. Pursuant to the Rights Agreement, the Company
reserves the right to require prior to the occurrence of a Triggering Event
(as defined below) that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock will be issued.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on November 7, 2006 (the
"Final Expiration Date"), unless the Final Expiration Date is extended or
unless the Rights are earlier redeemed or exchanged by the Company, in each
case, as described below.
In the event that a person or group of affiliated persons
becomes an Acquiring Person, each holder of a Right (the "Flip-In Right")
will thereafter have the right to receive, upon exercise, the number of
shares of Common Stock or of one-one-hundredths of a share of Preferred
Stock (or, in certain circumstances, cash, property or other securities of
the Company) having a value equal to two times the Purchase Price.
Notwithstanding any of the foregoing, following the occurrence of any such
event, all Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring Person (or
any affiliate or associate thereof) will be null and void.
For example, at an exercise price of $80 per Right, each
Right not owned by an Acquiring Person (or by any affiliate or associate
thereof) following an event set forth in the preceding paragraph would
entitle its holder to purchase $160 worth of Common Stock (or other
consideration, as noted above) for $80. Assuming that the Common Stock had
a per share value of $20 at such time, the holder of each valid Right would
be entitled to purchase eight shares of Common Stock for $80.
In the event that, at any time after a person or group of
affiliated persons has become an Acquiring Person, (i) the Company is
acquired in a merger or other business combination transaction or (ii) 50%
or more of the Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which previously have been voided as
set forth above) shall thereafter have the right (the "Flip-Over Right") to
receive, upon exercise, common stock of the acquiring company having a
value equal to two times the Purchase Price. The holder of a Right will
continue to have the Flip-Over Right whether or not such holder exercises
or surrenders the Flip-In Right. The events set forth in this paragraph and
in the second preceding paragraph are referred to as the "Triggering
Events."
<PAGE> 4
The Purchase Price payable, and the number of Units of
Preferred Stock, shares of Common Stock or other securities or property
issuable, upon exercise of the Rights are subject to adjustment from time
to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock, (ii)
if holders of the Preferred Stock are granted certain rights or warrants to
subscribe for Preferred Stock or convertible securities at less than the
current market price of the Preferred Stock, or (iii) upon the distribution
to holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments amount to at least 1%
of the Purchase Price. No fractional Units will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of
the Preferred Stock on the last trading date prior to the date of exercise.
The number of outstanding Rights and the number of Units
issuable upon exercise of each Right are also subject to adjustment in the
event of a stock split of the Common Stock or the Convertible Preferred
Stock or a stock dividend on the Common Stock or the Convertible Preferred
Stock payable in Common Stock or subdivisions, consolidations or
combinations of the Common Stock or the Convertible Preferred Stock
occurring, in any such case, prior to the Distribution Date.
Shares of the Preferred Stock purchasable upon exercise
of the Rights are not redeemable. Each share of Preferred Stock will
entitle its holder to dividends as, when and if declared by the Board of
Directors of $1 per share per quarter but will be entitled to an aggregate
dividend of 100 times the dividend declared on a share of Common Stock. In
the event of liquidation, the holders of the Preferred Stock will be
entitled to a minimum preferential liquidation payment of $100 per share,
plus accrued and unpaid dividends, but will be entitled to an aggregate
payment of 100 times the payment made per share of Common Stock. Each share
of Preferred Stock will have 100 votes, voting together with the Common
Stock and Convertible Preferred Stock. Finally, in the event of any merger,
consolidation or other transaction in which the Common Stock is exchanged,
each share of the Preferred Stock will be entitled to receive 100 times the
amount received per share of the Common Stock. These rights are protected
by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-hundredth interest
in a share of Preferred Stock purchasable upon exercise of each Right
should approximate the value of one share of Common Stock.
The shares of the Preferred Stock will rank, with respect
to the payment of dividends and as to the distribution of assets upon
liquidation, dissolution or winding up of the Company, junior to all other
series of preferred stock of the Company, including, without limitation,
the Convertible Preferred Stock, unless the Board of Directors should
<PAGE> 5
specifically determine otherwise in fixing the powers, preferences and
relative, participating, optional and other special rights of the shares of
any such other series in the qualifications, limitations and restrictions
thereof.
At any time after any person or group of affiliated or
associated persons becomes an Acquiring Person and prior to the acquisition
by such person or group of beneficial ownership of 50% or more of the
outstanding Common Stock, the Board of Directors may exchange the Rights
(other than Rights owned by the Acquiring Person which will have become
void), in whole or in part, at an exchange ratio of one share of Common
Stock or one Unit (or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and privileges) per
Right (subject to adjustment).
At any time prior to such time as any person or group of
affiliated or associated persons becomes an Acquiring Person, the Company
may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price") (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately
upon the action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Common
Stock (or other consideration) of the Company or for common stock of the
acquiring company as set forth above.
The terms of the Rights may be amended by the Board of
Directors without the consent of the holders of Rights, except that from
and after such time as any person or group of affiliated or associated
persons becomes an Acquiring Person, no such amendment may adversely affect
the interests of the holders of Rights.
As of October 31, 1996, there were 11,448,205 shares of
Common Stock and 122,863 shares of Convertible Preferred Stock outstanding,
122,863 shares of Common Stock issuable upon conversion of the shares of
Convertible Preferred Stock, 2,253,521 shares of Common Stock issuable upon
conversion of the Company's Convertible Subordinated Debentures due 2005,
1,884,773 shares of Common Stock issuable upon exercise of the Company's
Class B Warrants and 537,500 shares issuable upon exercise of stock
options. At such time, no shares of Common Stock were held in the Company's
treasury. Each outstanding share of Common Stock and Convertible Preferred
Stock on the Record Date will receive one Right. As long as the Rights are
attached to shares of Stock, the Company will issue one Right for each
share which becomes outstanding between the Record Date and the
Distribution Date so that all shares will have attached Rights and, in
<PAGE> 6
certain cases described in the Rights Agreement, the Company may issue one
Right for each share which becomes outstanding after the Distribution Date.
The Board of Directors has reserved for issuance upon exercise of the
Rights 500,000 shares of Preferred Stock.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that attempts to
acquire the Company in a manner or on terms not approved by the Board of
Directors unless the offer is conditional on a substantial number of Rights
being acquired. The Rights, however, should not affect any prospective
offeror willing to make an offer at a fair price and otherwise in the best
interests of the Company and its stockholders as determined by the Board of
Directors or willing to negotiate with the Board of Directors. The Rights
should not interfere with any merger or other business combination approved
by the Board of Directors since the Board of Directors may, at its option,
at any time until a person or group of affiliated persons becomes an
Acquiring Person, redeem all but not less than all the then outstanding
Rights at the Redemption Price.
The Rights Agreement between the Company and the Rights
Agent specifying the terms of the Rights (which includes as Exhibit A the
Certificate of Designations, Preferences and Rights, as Exhibit B the Form
of Rights Certificate and as Exhibit C the Form of Summary of Rights to
Purchase Preferred Stock) and the press release announcing the declaration
of the Rights are attached hereto as exhibits and are incorporated herein
by reference. The foregoing descriptions of the Rights does not purport to
be complete and are qualified in its entirety by reference to such
exhibits.
Item 7. Financial Statements and Exhibits.
Exhibits:
3 (ii) U.S. Home Corporation Amended and
Restated By-Laws as of October 17, 1996
4 Rights Agreement, dated as of
November 7, 1996, between U.S. Home
Corporation and First Chicago Trust
Company of New York, and exhibits thereto
10 Third Amendment to Credit Agreement,
dated as of November 4, 1996,
among U.S. Home Corporation, the
Lenders party to the Credit Agreement
and The First National Bank of Chicago, as
Agent
99 Press Release, dated November 8, 1996
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
U.S. HOME CORPORATION
Date: November 8, 1996 /s/ Chester P. Sadowski
-----------------------
Name: Chester P. Sadowski
Title: Vice President-Controller
and Chief Accounting
Officer
<PAGE> 8
EXHIBIT INDEX
Sequential
Exhibit Page No.
- ------- -----------
3(ii) U.S. Home Corporation Amended and Restated
By-Laws as of October 17, 1996 9
4 Rights Agreement, dated as of November 7,
1996, between U.S. Home Corporation and
First Chicago Trust Company of
New York, and exhibits thereto 24
10 Third Amendment to Credit Agreement,
dated as of November 4, 1996, among
U.S. Home Corporation, the Lenders party
to the Credit Agreement and The First
National Bank of Chicago, as Agent 88
99 Press Release, dated November 8, 1996 99
<PAGE> 9
EXHIBIT 3(ii)
U.S. HOME CORPORATION
AMENDED AND RESTATED
BY-LAWS
AS OF OCTOBER 17, 1996
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of the holders of
the capital stock (the "Stockholders") of U.S. Home Corporation (the
"Corporation") will be held within five calendar months after the end of
each fiscal year of the Corporation and will be held at a place and time
determined by the board of directors of the Corporation (the "Board of
Directors"). The first annual meeting to be held after the effective date
(the "Effective Date") of the plan of reorganization of the Corporation and
certain of its affiliates (the "USH Plan") will be held no earlier than the
date which is 9 months after the Effective Date and no later than the date
which is 13 months and 15 days after the Effective Date. Any previously
scheduled annual meeting of the Stockholders may be postponed by resolution
of the Board of Directors upon informing the Stockholders, by any means
reasonably calculated to so inform them of such postponement, on or prior
to the date previously scheduled for such annual meeting of Stockholders;
provided, that such means of informing the Stockholders of such
postponement complies with all applicable requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
1.2 Special Meetings. Special meetings of the
Stockholders may be called only by a majority of the entire Board of
Directors, and will be held at such time as may be fixed by the Board of
Directors and stated in the notice of such meeting. Any previously
scheduled special meeting of the Stockholders may be postponed by
resolution of the Board of Directors upon informing the Stockholders, by
any means reasonably calculated to so inform them of such postponement on
or prior to the date previously scheduled for such special meeting of
Stockholders; provided, that such means of informing the Stockholders of
such postponement complies with all applicable requirements of the Exchange
Act. The purpose or purposes of any special meeting of Stockholders will be
set forth in the Corporation's notice of meeting, and, except as otherwise
required by law or by the second restated certificate of incorporation of
the Corporation (the "Certificate of Incorporation"), no business will be
conducted at any special meeting of Stockholders other than the items of
business stated in the Corporation's notice of meeting.
1.3 Place and Time of Meetings. Meetings of the
Stockholders may be held in or outside Delaware at the place and time
specified by the Board of Directors or the directors or Stockholders
requesting the meeting.
<PAGE> 10
1.4 Notice of Meetings; Waiver of Notice. Written notice
of each meeting of Stockholders will be given to each Stockholder entitled
to vote at the meeting, except that (i) it will not be necessary to give
notice to any Stockholder who submits a signed waiver of notice before or
after the meeting, or is deemed to waive notice, and (ii) no notice of an
adjourned meeting need be given except when required under Section 1.5 or
1.12 of these By-Laws or by law. Each notice of a meeting will be given,
personally or by mail, not less than 10 nor more than 60 days before the
meeting and will state the time and place of the meeting, and unless it is
the annual meeting, will state at whose direction or request the meeting is
called and the purposes for which it is called. If mailed, notice will be
considered given when mailed to a Stockholder at his address on the
Corporation's records. The attendance of any Stockholder at a meeting,
without protesting at the beginning of the meeting that the meeting is not
lawfully called or convened, will constitute a waiver of notice by him.
1.5 Quorum. At any meeting of Stockholders, the presence
in person or by proxy of the holders of the shares of capital stock of the
Corporation having a majority of the votes which could be cast by the
holders of all issued and outstanding shares of capital stock of the
Corporation entitled to vote at the meeting will constitute a quorum for
the transaction of any business. In the absence of a quorum, a majority in
voting interest of those present or, if no Stockholders are present, any
officer entitled to preside at or to act as secretary of the meeting, may
adjourn the meeting until a quorum is present. At any adjourned meeting at
which a quorum is present, any action may be taken which might have been
taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken except that, if adjournment is for more than
30 days or if, after the adjournment, a new record date is fixed for the
meeting, notice of the adjourned meeting will be given pursuant to Section
1.4 hereof.
1.6 Voting; Proxies. Each Stockholder of record will be
entitled to the number of votes set forth in the Certificate of
Incorporation. Corporate action to be taken by Stockholder vote, other than
the election of directors, will be authorized by a majority of the votes
cast at a meeting of Stockholders, except as otherwise provided by law, the
Certificate of Incorporation or by any provision of these By-Laws.
Directors will be elected in the manner provided in Sections 2.1 and 2.2
hereof. Voting need not be by ballot unless requested by a Stockholder at
the meeting or ordered by the chairman of the meeting; however, all
elections of directors will be by written ballot, unless otherwise provided
in the Certificate of Incorporation. Each Stockholder entitled to vote at
any meeting of Stockholders may authorize another person to act for him or
her by proxy. Every proxy must be signed by the Stockholder or his
attorney-in-fact. No proxy will be valid after three years from its date
unless it provides otherwise.
<PAGE> 11
1.7 List of Stockholders. Not less than 10 days prior to
the date of any meeting of Stockholders, the secretary of the Corporation
will prepare a complete list of Stockholders entitled to vote at the
meeting, arranged in alphabetical order and showing the address of each
Stockholder and the number of shares registered in his or her name. For a
period of not less than 10 days prior to the meeting, the list will be
available during ordinary business hours for inspection by any Stockholder
for any purpose germane to the meeting. During this period, the list will
be kept either (i) at a place within the city where the meeting is to be
held, if that place is specified in the notice of the meeting, or (ii) if
not so specified, at the place where the meeting is to be held. The list
will also be available for inspection by Stockholders at the time and place
of the meeting.
1.8 No Action by Consent Without a Meeting. Action by
written consent of Stockholders will be governed by Article FOURTH of the
Certificate of Incorporation.
1.9 Organization. Meetings of the Stockholders will be
presided over by the chairman, or if the chairman is not present, by the
president, or, if neither of them is present, by a vice president, or, if
neither the chairman, the president nor a vice president is present, by a
chairman to be chosen at the meeting. The secretary of the Corporation, or
in his absence, an assistant secretary, will act as secretary of the
meeting, or, if neither the secretary nor an assistant secretary is
present, then the meeting will choose its secretary.
1.10 Inspectors of Election. The Corporation may, and
will if required by law, in advance of any meeting of Stockholders, appoint
one or more inspectors of election, who may be employees of the
Corporation, to act at the meeting or any adjournment thereof and to make a
written report thereof. The Corporation may designate one or more persons
as alternate inspectors to replace any inspector who fails to act. In the
event that no inspector so appointed or designated is able to act at a
meeting of Stockholders, the person presiding at the meeting will appoint
one or more inspectors to act at the meeting. Each inspector, before
entering upon the discharge of his or her duties, will take and sign an
oath to execute faithfully the duties of inspector with strict impartiality
and according to the best of his or her ability. The inspector or
inspectors so appointed or designated will (i) ascertain the number of
shares of capital stock of the Corporation outstanding and the voting power
of each such share, (ii) determine the shares of capital stock of the
Corporation represented at the meeting and the validity of proxies and
ballots, (iii) count all votes and ballots, (iv) determine and retain for a
reasonable period a record of the disposition of any challenges made to any
determination by the inspectors and (v) certify their determination of the
number of shares of capital stock of the Corporation represented at the
meeting and such inspectors' count of all votes and ballots. Such
certification and reports will specify such other information as may be
required by law. In determining the validity and counting of proxies and
ballots cast at any meeting of Stockholders, the inspectors may consider
such information as is permitted by applicable law. No person who is a
candidate for office at any election may serve as an inspector at such
election.
<PAGE> 12
1.11 Conduct of Meetings. Except to the extent
inconsistent with such rules and regulations as adopted by the Board of
Directors, the chairman of any meeting of Stockholders will have the right
and authority to prescribe such rules, regulations and procedures, and to
do all such acts as, in the judgment of such chairman, are appropriate for
the proper conduct of the meeting.
1.12 Fixing Date for Determination of Stockholders of
Record. In order that the Corporation may determine the Stockholders
entitled to notice of or to vote at any meeting of Stockholders or any
adjournment thereof, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of capital stock of
the Corporation or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date will not precede the
date upon which the resolution fixing the record date is adopted by the
Board of Directors and which record date: (i) in the case of determination
of Stockholders entitled to vote at any meeting of Stockholders or
adjournment thereof, will, unless otherwise required by law, not be more
than 60 nor less than 10 days before the date of such meeting and (ii) in
the case of any other action, will not be more than 60 days prior to such
other action. If no record date is fixed: (a) the record date for
determining Stockholders entitled to notice of or to vote at a meeting of
Stockholders will be at the close of business on the day next preceding the
day on which notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is held,
and (b) the record date for determining Stockholders for any other purpose
will be at the close of business on the day on which the Board of Directors
adopts the resolution relating thereto. A determination of Stockholders of
record entitled to notice of or to vote at a meeting of Stockholders will
apply to any adjournment of the meeting; provided, however, that the Board
of Directors may fix a new record date for the adjourned meeting.
1.13 Business at Meetings. Only business which is
properly brought before a meeting in accordance with the procedures set
forth in these By-Laws shall be conducted at such meeting. At any meeting
of Stockholders, only such business shall be conducted as shall have been
brought before the meeting (a) pursuant to the Corporation's notice of
meeting, (b) by or at the direction of the Board of Directors or (c) in the
case of any annual meeting only or as otherwise required by law, by any
Stockholder who is a Stockholder of record at the time of the giving of
notice hereinafter provided for in these By-Laws, who shall be entitled to
vote at any such meeting and who complies with the notice and delivery
procedures hereinafter set forth in these By-Laws. Except as otherwise
required by law or by the Certificate of Incorporation, no business will be
conducted at any special meeting of Stockholders other than the items of
business stated in the Corporation's notice of meeting.
<PAGE> 13
No person shall be eligible to serve as a director of the
Corporation unless nominated in accordance with the procedures set forth
in these By-Laws. If the chairman of the meeting shall determine either
that a nomination was not made in accordance with the procedures prescribed
by these By-Laws, that a nominee has not met the qualification requirements,
if any, set forth in these By-Laws or otherwise, or that business was not
properly brought before the meeting in accordance with the procedures
prescribed by these By-Laws, he shall so declare to the meeting and the
defective nomination shall be disregarded or such business shall not be
conducted, as the case may be; such determination shall not be appealable
by the Stockholders.
1.14 Nominations by Stockholders and Proposals by
Stockholders Generally. Nominations by Stockholders and proposals by
Stockholders for the conduct of any business shall be made pursuant to
timely notice in writing to the secretary of the Corporation and timely
delivery of the information provided for in these By-Laws to all of the
Stockholders. To be timely, a Stockholder's notice shall be personally
delivered to or mailed by certified mail and received at the principal
executive offices of the Corporation (a) in the case of an annual meeting,
not less than 90 days prior to the first anniversary of the preceding
year's annual meeting; provided, however, that in the event that the date
of the annual meeting is advanced by more than 30 days from such
anniversary date or delayed by more than 60 days from such anniversary
date, notice by the Stockholder to be timely must be so received not later
than the close of business on the later of the 90th day prior to such
annual meeting or the 10th day following the day on which public
announcement of the date of the meeting is first made (which may include
the delivery of notice to the New York Stock Exchange, the mailing of
notice of the date of the meeting to the Stockholders, any public filing
with the Securities and Exchange Commission or a press release to Dow Jones
& Company or any similar service) and (b) if otherwise permitted pursuant
to these By-Laws or required by law, in the case of a special meeting, not
later than the close of business on the 10th day following the day on which
public announcement of the date of the meeting is first made (which may
include the delivery of notice to the New York Stock Exchange, the mailing
of notice of the date of the meeting to the Stockholders, any public filing
with the Securities and Exchange Commission or a press release to Dow Jones
& Company or any similar service). Such Stockholder's notice shall set
forth, as the case may be, (i) as to each person whom the Stockholder
proposes to nominate for election as a director, all information relating
to such person that is required to be disclosed in solicitations of proxies
for election of directors, or is otherwise required, in each case pursuant
to Regulation 14A promulgated under the Exchange Act (including such
person's written consent to being named in the proxy statement as a nominee
and to serving as a director if elected) and information establishing such
person's fulfillment of any qualification requirements set forth in these
By-Laws or otherwise; (ii) as to each matter which the Stockholder proposes
to bring before such meeting, a brief description of the business desired
to be brought before the meeting, the reasons for conducting such business
at the meeting and any material interest in such business of such
Stockholder and the beneficial owner, if any, on whose behalf the proposal
is made; and (iii) as to the Stockholder giving the notice (A) the name and
<PAGE> 14
address, as they appear on the Corporation's books, of such Stockholder,
(B) the class and number of shares of the Corporation which are owned by
such Stockholder and (C) a representation that such Stockholder is a holder
of record of stock of the Corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to nominate the
person or persons whom such Stockholder specified in the notice or to
propose the conduct of the business specified in the notice, as the case
may be.
Notwithstanding the forgoing provisions of this By-Law, a
Stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations promulgated thereunder with
respect to solicitation of proxies and the matters set forth in these
By-Laws. In addition, and without limiting the generality of the
foregoing, nothing in these By-Laws shall be deemed to affect any rights
of a Stockholder to request inclusion of proposals in the Corporation's
proxy statement pursuant to and in compliance with Rule 14a-8 under the
Exchange Act.
1.15 Additional Procedures for Nominations by
Stockholders and Proposals by Stockholders. In addition to the notice to
the Corporation set forth in Section 1.14 of these By-Laws, in order for a
Stockholder to properly nominate or elect a director, whether at a meeting
or by consent of Stockholders (to the extent such action by Stockholders
may be taken by consent without meeting in accordance with the Certificate
of Incorporation), or propose the conduct of business at a meeting or by
consent of Stockholders (to the extent such action by Stockholders may be
taken by consent without meeting in accordance with the Certificate of
Incorporation), such Stockholder shall mail, or otherwise cause to be
delivered, to all of the Stockholders, as the case may be, (a) as to each
person whom such Stockholder proposes to nominate for election as a
director, the name of such person, together with all information relating
to such person that is required to be disclosed in solicitations of proxies
for election of directors, or is otherwise required, in each case pursuant
to Regulation 14A or Regulation 14C promulgated under the Exchange Act, and
any other information required by the proxy rules promulgated under the
Exchange Act, and (b) as to each matter which the Stockholder proposes to
bring before the meeting or have acted on by consent, a brief description
of the business desired to be brought before the meeting or have acted on
by consent and the reasons for conducting such business at the meeting or
by consent, together with all information relating to such proposal that is
required to be disclosed in solicitations of proxies, or is otherwise
required, in each case pursuant to Regulation 14A or by Regulation 14C
promulgated under the Exchange Act, and any other information required by
the proxy rules promulgated under the Exchange Act. To be timely, such
information shall be mailed to all of the Stockholders not less than 30
days prior to the date of such meeting or, if later, the second day
following the day on which public announcement of the date of the meeting
is first made (which may include the delivery of notice to the New York
Stock Exchange, the mailing of notice of the date of the meeting to the
Stockholders, any public filing with the Securities and Exchange Commission
or a press release to Dow Jones & Company or any similar service). Such
Stockholder may request the Corporation to mail promptly such information
to all of the Stockholders on such Stockholder's behalf, and the expense of
<PAGE> 15
such mailing shall be borne by the Corporation. If, pursuant to the proxy
rules promulgated under the Exchange Act, the Corporation is obligated to
include such Stockholder's proposal in its own proxy statement, the
provisions of this paragraph shall be deemed satisfied.
2. BOARD OF DIRECTORS.
2.1 Powers. (a) Subject to applicable law and the
Certificate of Incorporation, the business and affairs of the Corporation
will be managed by the Board of Directors; and all powers of the
Corporation may be exercised by or under the authority of the Board of
Directors.
(b) Subject to applicable law and the Certificate of
Incorporation, and in addition to all other matters requiring approval by
the Board of Directors, approval by the Board of Directors will be required
for the following matters: (i) the dismissal and appointment of the
chairman, president or any vice president of the Corporation, (ii) the
compensation of the chairman, president or any vice president of the
Corporation, (iii) any material change in the business of the Corporation
as of the Effective Date, (iv) any acquisition of unimproved real property
or acreage by the Corporation which is material to the Corporation and its
subsidiaries on a consolidated basis in any single transaction including,
without limitation, option deposits, joint venture investments and forward
commitments, involving an expenditure in excess of $5 million, (v) other
than transactions covered by the preceding clause, material capital
expenditures, borrowings (other than borrowings under a revolving credit
facility if the Board of Directors has previously authorized the
Corporation to enter into any such facility) and other commitments by the
Corporation in excess of $5 million per transaction (excluding transactions
involving housing inventory) and (vi) the annual business plan and budget
of the Corporation. Approval by the Corporation, as shareholder, of any
action taken by a subsidiary of U.S. Home of the type described in clauses
(iii), (iv) or (v) will require prior approval by the Board of Directors.
2.2 Number and Election. The Board of Directors will
consist of the number of directors as determined in accordance with
paragraph 1 of Article SIXTH of the Certificate of Incorporation. Directors
will be elected by a plurality of the votes cast in accordance with the
provisions of Section 2.3 hereof, and subject to the provisions of Section
2.13 hereof.
2.3 Classes and Term. The classes and terms of the
directors will be as set forth in Article SIXTH of the Certificate of
Incorporation.
<PAGE> 16
2.4 Quorum and Manner of Acting. A majority of the Board
of Directors will constitute a quorum for the transaction of business at
any meeting, except as provided in Section 2.13 hereof. Subject to Section
2.13 hereof and the Certificate of Incorporation, action of the Board of
Directors will be authorized by the vote of a majority of the directors
present at the time of the vote if there is a quorum, unless otherwise
provided by law or these By-Laws. In the absence of a quorum, a majority of
the directors present may adjourn any meeting from time to time until a
quorum is present.
2.5 Place of Meetings. Meetings of the Board of Directors
may be held in or outside Delaware.
2.6 Annual and Regular Meetings. Annual meetings of the
Board of Directors, for the election of officers and consideration of other
matters, will be held either (i) without notice immediately after the
annual meeting of Stockholders and at the same place or (ii) as soon as
practicable after the annual meeting of Stockholders, on notice as provided
in Section 2.8 hereof. Regular meetings of the Board of Directors may be
held without notice at such times and places as the Board of Directors
determines. If the day fixed for a regular meeting is a legal holiday, the
meeting will be held on the next business day.
2.7 Special Meetings. Special meetings of the Board of
Directors may be called by the chairman, the president or by a majority of
the directors. Only business related to the purposes set forth in the notice
of meeting may be transacted at a special meeting.
2.8 Notice of Meetings; Waiver of Notice. Notice of the
time and place of each special meeting of the Board of Directors, and of
each annual meeting not held immediately after the annual meeting of
Stockholders and at the same place, will be given to each director by
mailing it to him at his or her residence or usual place of business at
least three days before the meeting, or by delivering or telephoning or
telecopying it to him or her at least two days before the meeting. Notice
of a special meeting will also state the purpose or purposes for which the
meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the
meeting without protesting at the beginning of the meeting the transaction
of any business because the meeting was not lawfully called or convened.
Notice of any adjourned meeting need not be given, other than by
announcement at the meeting at which the adjournment is taken.
2.9 Board of Directors or Committee Action Without a
Meeting. Any action required or permitted to be taken by the Board of
Directors or by any committee of the Board of Directors may be taken
without a meeting if all of the members of the Board of Directors or of the
committee consent in writing to the adoption of a resolution authorizing
the action. The resolution and the written consents by the members of the
Board of Directors or the committee will be filed with the minutes of the
proceeding of the Board of Directors or of the committee.
<PAGE> 17
2.10 Participation in Board of Directors or Committee
Meetings by Conference Telephone. Any or all members of the Board of
Directors or of any committee of the Board of Directors may participate in
a meeting of the Board of Directors or of the committee by means of a
telephone conference or similar communications equipment allowing all
persons participating in the meeting to hear each other at the same time.
Participation by such means will constitute presence in person at the
meeting.
2.11 Resignation. Subject to Article SIXTH of the
Certificate of Incorporation, any director may resign at any time by
delivering his resignation in writing to the president or secretary of the
Corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, will not be
necessary to make it effective.
2.12 Removal. A director may only be removed from office
in accordance with Article SIXTH of the Certificate of Incorporation.
2.13 Vacancies. Any vacancy in the Board of Directors
will be filled in accordance with Article SIXTH of the Certificate of
Incorporation.
2.14 Compensation. Directors will receive such
compensation as the Board of Directors determines, together with
reimbursement of their reasonable expenses in connection with the
performance of their duties. A director may also be paid for serving the
Corporation, its affiliates or subsidiaries in other capacities.
2.15 Nominations of Directors. Nominations of persons for
election to the Board of Directors may only be made (a) by the Board of
Directors in accordance with Article SIXTH of the Certificate of
Incorporation or (b) other than nominations of persons for election to the
Board of Directors due to expiring terms of directors, at any meeting of
Stockholders (i) by or at the direction of the Board of Directors or (ii)
by any Stockholder who is a Stockholder of record at the time of the giving
of notice provided for in these By-Laws, who shall be entitled to vote for
the election of directors at the meeting and who complies with the notice
and delivery procedures set forth in these By-Laws; provided that such
nominations by Stockholders at a special meeting of Stockholders may only
be made at any such meeting at which directors are to be elected pursuant
to the Corporation's notice of meeting or as otherwise required by law or
permitted by these By-Laws.
<PAGE> 18
3. COMMITTEES.
3.1 Executive Committee. The Board of Directors, by
resolution adopted by a majority of the entire Board of Directors, may
designate an Executive Committee of two or more directors, which will
include the chairman and president and which will have all the powers and
authority of the Board of Directors, except as otherwise provided in such
resolution, section 141(c) of the Delaware General Corporation Law, any
other applicable law or Section 2.1(b) hereof. The members of the Executive
Committee will serve at the pleasure of the Board of Directors. All actions
of the Executive Committee will be reported to the Board of Directors at
its next meeting.
3.2 Other Committees. The Board of Directors, by
resolution adopted by a majority of the entire Board of Directors, may
designate other committees of directors of one or more directors, which
will serve at the pleasure of the Board of Directors and have such powers
and duties as the Board of Directors determines.
3.3 Rules Applicable to Committees. The Board of
Directors may designate one or more directors as alternate members of any
committee who would otherwise qualify under Sections 3.1 and 3.2 hereof,
who may replace any absent or disqualified member at any meeting of the
committee. All action of a committee will be reported to the Board of
Directors at its next meeting. Each committee will adopt rules of procedure
and will meet as provided by those rules or by resolutions of the Board of
Directors.
4. OFFICERS.
4.1 Classes. The officers of the Corporation will be
divided into two classes: corporate officers who will be officers of the
Corporation for all purposes with the powers and authority for their
respective offices as set forth in Section 4.2 hereof, and division
officers who will be officers of the Corporation for limited purposes and
with limited authority for their respective offices as set forth in Section
4.3 hereof.
4.2 Corporate Officers.
4.2.1 Election. Corporate officers will be chosen by
the Board of Directors and may include a chairman, president, senior vice
president, vice president, chief financial officer, chief accounting officer,
secretary, treasurer and controller. The Board of Directors may also choose
additional senior vice presidents, vice presidents and one or more assistant
secretaries and treasurers, and such other officers and agents as it deems
necessary. Only the chairman and president need be a member of the Board of
Directors.
<PAGE> 19
4.2.2 Term; Powers. Corporate officers will hold
their offices for such terms as determined by the Board of Directors and
until their successors are chosen and qualified. Corporate officers will
possess and may exercise all the powers and privileges granted to officers
under the Delaware General Corporation Law, together with any powers
incidental thereto, including, without limitation, the power and
authority to execute and deliver by and on behalf of the Corporation all
contracts, agreements, deeds, bills of sale, leases, mortgages, notes,
releases, indentures, guaranties, certificates, instruments, satisfactions
of mortgages and other documents. Corporate officers will perform such
duties and have such responsibilities as are set forth in these By-Laws
and as will be determined from time to time by the Board of Directors.
The compensation of all corporate officers will be fixed by the Board of
Directors.
4.2.3 Removal; Vacancies. Corporate officers may be
removed and vacancies in corporate offices will be filled in accordance
with Article SEVENTH of the Certificate of Incorporation.
4.2.4 Chairman. The chairman will be the chief
executive officer of the Corporation, will have such powers as are set forth
in Section 4.2.2 hereof, and will be responsible for the effective operation
of the Board of Directors and coordinate its various activities and the
activities of its several committees. The chairman will preside at each
meeting of the Board of Directors and of the Stockholders and approve the
agenda and guide the deliberations of all such meetings. The chairman may
appoint, assign duties to, and discharge agents and employees, and will
perform all the duties and have all the powers incident to his office or
assigned or delegated to him by the Board of Directors.
4.2.5 President. The president will b e the chief
operating officer of the Corporation and will have the powers as set forth
in Section 4.2.2 hereof, and will have general supervision over the business
of the Corporation and over its several officers with power to delegate
authority and assign duties to them. The president will, in the absence of
the chairman, preside at meetings of the Stockholders and of the Board of
Directors. The president will perform such other duties and have such
other powers incident to his office or assigned or delegated to him by the
Board of Directors.
4.2.6 Senior Vice Presidents and Vice Presidents.
The senior vice presidents and the vice presidents will have the powers as
set forth in Section 4.2.2 hereof, and will, in the absence or disability of
the chairman and the president, perform the duties and exercise the powers
of the chairman and the president of the Corporation. They will perform
such other duties and have such other powers as the Board of Directors
may from time to time prescribe.
4.2.7 Chief Financial Officer. The corporate officer
designated by the Board of Directors will be the chief financial officer of
the Corporation and will perform such other duties and will have such other
powers as the Board of Directors may from time to time prescribe.
<PAGE> 20
4.2.8 Chief Accounting Officer. The vice president,
controller will be the chief accounting officer of the Corporation and will
perform such other duties and will have such other powers as the Board of
Directors may from time to time prescribe.
4.2.9 Secretary and Assistant Secretaries. (a) The
secretary will attend all meetings of the Board of Directors and all meetings
of the Stockholders and record all the proceedings of the meetings of the
Stockholders and of the Board of Directors in a book to be kept for that
purpose and will perform like duties for the standing committees when
required. The secretary will give, or cause to be given, notice of all
meetings of the Stockholders and special meetings of the Board of Directors,
and will perform such other duties as may be prescribed by the Board of
Directors or the chief executive officer, under whose supervision he will
be. The secretary will keep in safe custody the seal of the Corporation,
and, when authorized by the Board of Directors, affix the same to any
instrument requiring it and, when so affixed, it will be attested by his
or her signature or by the signature of the treasurer or an assistant
secretary.
(b) The assistant secretaries in the order of their
seniority, unless otherwise determined by the Board of Directors, will, in
the absence or disability of the secretary, perform the duties and exercise
the powers of the secretary. They will perform such other duties and have
such other powers as the Board of Directors may from time to time prescribe.
4.2.10 Treasurer. (a) The treasurer will have the
custody of the corporate funds and securities and will keep full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation and will deposit all moneys and other valuable effects in the
name and to the credit of the Corporation in such depositories as may be
designated by the Board of Directors.
(b) The treasurer will disburse the funds of the
Corporation as may be ordered by the Board of Directors, taking proper
vouchers for such disbursements, and will render to the president and
the Board of Directors, at its regular meetings, or when the Board of
Directors so requires, an account of all his or her transactions as
treasurer and of the financial condition of the Corporation.
(c) If required by the Board of Directors, the
treasurer will give the Corporation a bond (which will be renewed every
six years) in such sum and with such surety or sureties as will be
satisfactory to the Board of Directors for the faithful performance of
the duties of the treasurer's office and for the restoration to the
Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under the treasurer's control belonging to the
Corporation.
<PAGE> 21
4.3 Division Officers.
4.3.1 Presidents of Operations; Division Chairmen
and Division Presidents. There will be several areas of operation designated
by the president of the Corporation, each of which will consist of one or
more divisions of the Corporation. Each such area of operations may have
a president, whose title will be president of operations, U.S. Home
Corporation (name of area of operations), and who will be designated
and appointed by the president of the Corporation. The president of the
Corporation will also fix the compensation of each such president of
operations. Each division within each area of operations will have a
division president and if designated and appointed by the president of
operations, a division chairman, whose respective titles will be president
(name of division) and chairman (name of division), who will hold office
for such term as will be determined by the president of operations in charge
of such division. The president of operations will fix the compensation
of each division chairman and division president within the area of
operations of such president of operations. All designations and appointments
of presidents of operations, division chairmen and division presidents
will be made by the execution and delivery of a written certificate to
such effect. A vice president of the Corporation designated by the
president of the Corporation to be in charge of one or more divisions will
have all the powers of a president of operations, in addition to the powers
of an officer of the Corporation.
4.3.2 Other Officers. Each area of operations and
each division of the Corporation may have such other officers as will be
designated and appointed by a president of operations, division chairman
or a division president by executing a written certificate to such
effect and may include, without limitation, vice presidents, secretaries,
controllers and such other officers and agents as the president of
operations, division chairman or division president in his or her discretion
will deem necessary and proper. Such officers will hold their offices for
such terms as will be determined by the president of operations of such
area of operations, the division chairman or the division president,
from time to time and until their successors are chosen and qualified.
Such officers will have such powers and perform such duties as set forth in
Sections 4.3.3 and 4.3.4 hereof and may be removed at any time with or without
cause by the president of operations of such area of operations, the division
chairman or the division president, and vacancies in such division offices
may be filled at any time as provided in this Section 4.3.2.
4.3.3 General Powers. Each president of operations,
division chairman, division president and other officers of areas of
operations and divisions will have the limited powers and authority as an
officer of the Corporation subject to the further limitation in the next
full sentence, to execute and deliver, by and on behalf of the Corporation,
all contracts, agreements, deeds, bills of sales, mortgages, notes, releases,
indentures, guaranties, leases, certifications, satisfactions of mortgage,
and other documents which relate solely to the business, operations and
properties of his or her area of operations or division and which require
for valid execution, delivery and implementation under applicable law the
<PAGE> 22
authorization of an officer of the Corporation; such officers will have the
power and authority to affix the corporate seal to any such documents
and any area of operations or division secretary or assistant secretary,
or area of operations or division controller, may attest thereto by his or
her signature. Notwithstanding the generality of the foregoing, only
presidents of operations, division chairmen, division presidents or vice
presidents of areas of operations or vice presidents of divisions will have
the authority to approve, execute and deliver, in the name and on behalf
of the Corporation, contracts for the sale and purchase of real property
or interests therein, and to execute and approve any documents, including,
without limitation, deeds, notes, mortgages and leases and take any action
deemed necessary and proper by such officers in connection with such sale
or purchase of real property, so long as such transactions or series of
related transactions have been approved by the Asset Management Committee
of the Corporation; provided, that no such transaction or series of related
transactions will exceed $4,999,999 without the prior approval of the
president of the Corporation or the Board of Directors; nor will any
officer of an area of operations or a division therein be authorized to
enter into any contract for the purchase of any permanent mortgage
commitments which require the mandatory delivery of mortgages or any
permanent mortgage commitment which provides for liability to the
Corporation of more than 1 percent of the amount of the commitment without
first having obtained the approval of the president of the Corporation or
the chief financial officer of the Corporation or other senior officer of
the Corporation. The authority of officers of areas of operations and
divisions set forth in this Section 4.3.3 may be increased or reduced by
subsequent resolution of the Board of Directors.
4.3.4 Bank Accounts. Each president of operations,
each division chairman and each division president will have the authority
on behalf of the Corporation and with respect to the funds of his area of
operations or division to open, maintain and close depository, payroll,
escrow, savings and other accounts with any commercial banks, savings and
loan associations or other financial institutions, and, in connection
therewith, to authorize other officers and employees of such area of
operations or division to have such signatory and other authority with
respect to any and all such accounts as such officer in his or her discretion
deems necessary and proper, and to approve any and all resolutions required
by such banks, savings and loan associations or other financial institutions
for the opening and maintenance of any such accounts.
5. SHARES.
5.1 Certificates. The Corporation's shares will be
represented by certificates in the form approved by the Board of Directors.
Each certificate will be signed by the chairman, the president or a vice
president and by the secretary or an assistant secretary, or the treasurer
or an assistant treasurer, and will be sealed with the Corporation's seal
or a facsimile of the seal. Any or all of the signatures on the certificate
may be a facsimile.
<PAGE> 23
5.2 Transfers. Subject to Article FIFTH of the
Certificate of Incorporation, shares will be transferable only on the
Corporation's books, upon surrender of the certificate for the shares,
properly endorsed. The Board of Directors may require satisfactory surety
before issuing a new certificate to replace a certificate claimed to have
been lost or destroyed.
5.3 Determination of Stockholders of Record. The
Board of Directors may fix, in advance, a date as the record date for the
determination of Stockholders entitled to notice of or to vote at any
meeting of the Stockholders, or to receive payment of any dividend or the
allotment of any rights, or for the purpose of any other action. The record
date may not be more than 60 or less than 10 days before the date of the
meeting or more than 60 days before any other action.
6. MISCELLANEOUS.
6.1 Seal. The Board of Directors will adopt a
corporate seal, which will be in the form of a circle and will bear the
Corporation's name and the year and state in which it is incorporated.
6.2 Fiscal Year. The Board of Directors may
determine the Corporation's fiscal year from time to time. Until changed by
the Board of Directors, the Corporation's fiscal year will be the 12-month
period ending December 31 in each year.
6.3 Voting of Shares in Other Corporations.
Shares in other corporations which are held by the Corporation may be
represented and voted by the president or a vice president of the Corporation
or by proxy or proxies appointed by one of them. The Board of Directors may,
however, appoint another person to vote the shares.
6.4 Amendments.
(a) These By-Laws may be amended, repealed or new
By-Laws may be adopted by the Stockholders or by a majority of the Board of
Directors.
(b) Notwithstanding anything to the contrary
contained in Section 6.4(a) hereof, until the annual meeting of Stockholders
to be held in 1996, the amendment or repeal of Sections 1.8, 2.2, 2.3, 2.8,
2.9, 2.12, 2.13, 2.15 and 6.4(b) hereof will require the affirmative vote of
the holders of the shares of capital stock of the Corporation having at least
75 percent of the votes which could be cast by the holders of all of the
issued and outstanding shares of capital stock of the Corporation entitled
to vote or by the affirmative vote of 75 percent of the Board of Directors.
<PAGE> 24
EXHIBIT 4
U.S. HOME CORPORATION
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
Rights Agent
---------------
Rights Agreement
Dated as of November 7, 1996
<PAGE> 25
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of November 7, 1996, between
U.S. Home Corporation, a Delaware corporation (the "Company"), and First
Chicago Trust Company of New York (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on November 7, 1996, the Rights Dividend
Declaration Date (as hereinafter defined), the Board of Directors of the
Company (the "Board of Directors") authorized and declared a dividend
distribution of one Right (as hereinafter defined) for each share of the
Company's Common Stock (as hereinafter defined) and Convertible Preferred
Stock (as hereinafter defined) outstanding at the Close of Business (as
hereinafter defined) on the Record Date (as hereinafter defined), and has
authorized and directed the issuance of one such Right (as such number may
hereinafter be adjusted) for each share of Stock (as hereinafter defined)
that shall become outstanding between the Record Date (whether originally
issued or delivered from the Company's treasury) and the Distribution Date
(as hereinafter defined), and in certain circumstances provided in Section
22 hereof, after the Distribution Date, each such Right initially
representing the right to purchase one one-hundredth of a share of Series A
Junior Non-Cumulative Preferred Stock of the Company, having the rights,
powers and preferences set forth in the form of Certificate of
Designations, Preferences and Rights attached hereto as Exhibit A, upon the
terms and subject to the conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties, intending to be legally
bound, hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
1.1 "Acquiring Person" shall mean any (i) Person (other than an
Institutional Stockholder) who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of 15% or more of
the shares of the Company's Common Stock then outstanding or was such a
Beneficial Owner at any time after the date hereof, whether or not such
Person continues to be the Beneficial Owner of 15% or more of the Company's
then outstanding Common Stock, or (ii) Institutional Stockholder who or
which, together with all Affiliates and Associates of such Institutional
Stockholder, shall be the Beneficial Owner of 20% or more of the shares of
the Company's Common Stock then outstanding or was such a Beneficial Owner
at any time after the date hereof, whether or not such Institutional
Stockholder continues to be the Beneficial Owner of 20% or more of the
Company's then outstanding Common Stock, but shall not include (a) the
Company, (b) any Subsidiary of the Company, (c) any employee benefit plan
of the Company or of any Subsidiary of the Company or (d) any Person
<PAGE> 26
organized, appointed or established by the Company for or pursuant to the
terms of any such plan; provided, that "Acquiring Person" shall not include
any Person who becomes an Acquiring Person solely as a result of a
reduction in the number of shares of the Company's Common Stock outstanding
due to the repurchase of shares of Common Stock by the Company, unless and
until such Person or an Affiliate or Associate thereof shall purchase or
otherwise become the Beneficial Owner of additional shares of Common Stock
of the Company. Notwithstanding the foregoing, if the Board of Directors
determines in good faith that a Person who would otherwise be an "Acquiring
Person" as defined pursuant to the foregoing provisions of this Section
1.1, has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares of the Company's Common Stock so
that such Person would no longer be an "Acquiring Person," as defined
pursuant to this Section 1.1, then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
1.2 "Act" shall mean the Securities Act of 1933, as amended.
1.3 "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
1.4 "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 under the Exchange Act as in effect on the date of this Agreement.
1.5 "Agreement" shall mean this Rights Agreement, as the same may be
amended, supplemented or modified from time to time.
1.6 "Associate" shall have the meaning ascribed to such term in Rule
12b-2 under the Exchange Act as in effect on the date of this Agreement.
1.7 A Person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to
acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not
in writing) or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to
a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for
purchase or exchange, or (B) securities issuable upon
exercise of Rights at any time prior to the occurrence
of a Triggering Event, or (C) securities issuable upon
exercise of Rights from and after the occurrence of a
Triggering Event which Rights were acquired by such
Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section
<PAGE> 27
3(a) or Section 22 hereof (the "Original Rights") or
pursuant to Section 11(i) hereof in connection with an
adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to
vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 under the Exchange
Act as in effect on the date hereof), including
pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided,
however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any
security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such
security if such agreement, arrangement or
understanding: (A) arises solely from a revocable proxy
or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the
Exchange Act, and (B) is not also then reportable by
such Person on Schedule 13D under the Exchange Act (or
any comparable or successor schedule or report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in
writing), for the purpose of acquiring, holding, voting
(except as described in the proviso to the preceding
subparagraph) or disposing of any voting securities of
the Company; provided, however, that nothing in this
subparagraph shall cause a Person engaged in business
as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities
acquired through such Person's participation in good
faith in a firm commitment underwriting until the
expiration of 40 days after the date of such
acquisition.
Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which
such Person would be deemed to beneficially own hereunder.
1.8 "Board of Directors" shall have the meaning set forth in the
WHEREAS clause hereof.
<PAGE> 28
1.9 "Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
1.10 "Close of Business" on any given date shall mean 5:00 p.m., New York
City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m., New York City time, on the next
succeeding Business Day.
1.11 "Common Stock" when used with reference to the Company shall mean
the common stock, $.01 par value per share, of the Company, or, in the
event of a subdivision, combination or consolidation with respect to such
shares of common stock, the shares resulting from such subdivision,
combination or consolidation. "Common Stock" when used with reference to
any Person other than the Company shall mean the capital stock (or equity
interest) with the greatest voting power of such other Person, or, if such
other Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
1.12 "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
1.13 "Company" shall have the meaning set forth in the introductory
paragraph hereof.
1.14 "Convertible Preferred Stock" shall mean the convertible redeemable
preferred stock, $.10 par value per share, of the Company, or, in the
event of a subdivision, combination or consolidation with respect to such
shares of convertible redeemable preferred stock, the shares resulting from
such subdivision, combination or consolidation.
1.15 "Current Market Price" shall have the meaning set forth in Section
11(d)(i) hereof.
1.16 "Current Value" shall have the meaning set forth in Section 11(a)
iii) hereof.
1.17 "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
1.18 "equivalent preferred shares" shall have the meaning set forth in
Section 11(b) hereof.
1.19 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.20 "Exchange Ratio" shall have the meaning set forth in Section 24
hereof.
1.21 "Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
1.22 "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
<PAGE> 29
1.23 "Institutional Stockholder" shall mean any Person who is and
continues to be eligible under Rule 13d-1 under the Exchange Act as in effect
on the date hereof to file a Schedule 13G with respect to such Person's
ownership of the Common Stock.
1.24 "NASDAQ" shall have the meaning set forth in Section 11(d)(i)
hereof.
1.25 "Original Rights" shall have the meaning set forth in Section
1.7(i) hereof.
1.26 "Person" shall mean any individual, firm, corporation, partnership,
trust, association, joint venture, limited liability company or other entity,
and shall include any successor (by merger or otherwise) of such entity.
1.27 "Preferred Stock" shall mean shares of Series A Junior
Non-Cumulative Preferred Stock, $.10 par value per share, of the Company
having the relative rights, preferences and limitations set forth in the
Certificate of Designations attached to this Agreement as Exhibit A, and,
to the extent that there are not a sufficient number of shares of Series A
Junior Non-Cumulative Preferred Stock authorized to permit the full
exercise of the Rights, any other series of Preferred Stock, $.10 par value
per share, of the Company designated for such purpose containing terms
substantially similar to the terms of the Series A Junior Non-Cumulative
Preferred Stock.
1.28 "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
1.29 "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
1.30 "Record Date" shall be December 4, 1996.
1.31 "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
1.32 "Rights" shall have the meaning set forth in the WHEREAS clause
hereof.
1.33 "Rights Agent" shall have the meaning set forth in the
introductory paragraph hereof.
1.34 "Rights Certificate" shall have the meaning set forth in Section
3(a) hereof.
1.35 "Rights Dividend Declaration Date" shall mean November 7, 1996.
1.36 "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
<PAGE> 30
1.37 "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii) hereof.
1.38 "Section 13 Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) hereof.
1.39 "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
1.40 "Stock" shall mean the shares of the Company's Common Stock and
Convertible Preferred Stock.
1.41 "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such.
1.42 "Subsidiary" of any Person shall mean any corporation or other
Person of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person or otherwise controlled by such Person.
1.43 "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
1.44 "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
1.45 "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
1.46 "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Stock) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates. (a) Until the earlier of (i)
the Close of Business on the tenth day after the Stock Acquisition Date
(or, if the tenth day after the Stock Acquisition Date occurs before the
Record Date, the Close of Business on the Record Date) and (ii) the Close
of Business on the tenth Business Day (or such later date as the Board of
Directors shall determine prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the
<PAGE> 31
terms of any such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan) to commence, a
tender or exchange offer the consummation of which would result in any
Person becoming an Acquiring Person (including any such date which is after
the date of this Agreement and prior to the issuance of the Rights; the
earlier of (i) and (ii) being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to Section 3(b) hereof)
by the certificates for the Stock registered in the names of the holders
thereof and not by separate Rights Certificates, and (y) the right to
receive Rights Certificates will be transferable only in connection with
the transfer of the underlying shares of Stock (including a transfer to the
Company). As soon as practicable after the Distribution Date, the Company
will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent by first-class, postage-prepaid mail,
to each record holder of the Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of
the Company, one or more right certificates, in substantially the form of
Exhibit B hereto (the "Rights Certificates"), evidencing one Right for each
share of Stock so held, subject to adjustment as provided herein. As of and
after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(b) On the Record Date or as promptly as practicable thereafter, the
Company will send a copy of a Summary of Rights, in substantially the form
of Exhibit C hereto (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of the Stock as of the Close of
Business on the Record Date, at the address of such holder shown on the
records of the Company. With respect to certificates for the Stock
outstanding as of the Record Date, until the Distribution Date, the Rights
will be evidenced by such certificates for Stock registered in the names of
the holders thereof and together with a copy of the Summary of Rights
attached hereto, the registered holders of the Stock shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date, the surrender for transfer of any
certificate for shares of Stock outstanding on the Record Date, with or
without a copy of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with such shares of Stock
represented thereby.
(c) Certificates for Stock which become outstanding (including, without
limitation, reacquired Stock referred to in the last sentence of this
Section 3(c)) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date, or, in certain circumstances
provided in Section 22 hereof, after the Distribution Date shall be deemed
to be certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights
<PAGE> 32
Agreement between U.S. Home Corporation (the "Company")
and First Chicago Trust Company of New York (the
"Rights Agent"), dated as of November 7, 1996 (as the
same may be amended from time to time, the "Rights
Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at
the principal offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate.
The Company will mail to the holder of this certificate
a copy of the Rights Agreement, as in effect on the
date of mailing, without charge after receipt of a
written request therefor. Under certain circumstances
set forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associates thereof (as such
terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or (ii) the
Expiration Date, the Rights associated with the Stock represented by
such certificates shall be evidenced by such certificates alone, and
the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Stock
represented thereby. In the event the Company purchases or acquires
any Stock (including, without limitation, upon conversion or
redemption of any share of Convertible Preferred Stock) after the
Record Date but prior to the Distribution Date, any Rights associated
with such Stock shall be deemed cancelled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Stock
which is no longer outstanding.
Section 4. Form of Rights Certificates. (a) The Rights Certificates
(and the forms of election to purchase and of assignment to be printed on
the reverse thereof) shall each be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to time
be listed, or to conform to usage. Subject to the provisions of Section 22
hereof, the Rights Certificates shall entitle the holders thereof to
purchase such number of one one-hundredths of a share of Preferred Stock as
shall be set forth therein at the price set forth therein (such exercise
price per one one-hundredth of a share, the "Purchase Price"), but the
amount and type of securities purchasable upon the exercise of each Right
and the Purchase Price thereof shall be subject to adjustment as provided
herein.
<PAGE> 33
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section
22 hereof that represents Rights which are null and void pursuant to
Section 7(e) of this Agreement, and any Rights Certificate issued pursuant
to Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are
or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). Accordingly,
this Rights Certificate and the Rights represented
hereby may become null and void in the
circumstances specified in Section 7(e) of such
Agreement.
Provisions of Section 7(e) of this Agreement shall be operative whether or
not the foregoing legend is contained on any Rights Certificate.
Section 5. Countersignature and Registration. (a) The Rights
Certificates shall be executed on behalf of the Company by its Chairman of
the Board, its President or any of its Vice Presidents, either manually or
by facsimile signature, and shall have affixed thereto the Company's seal
or a facsimile thereof and shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be countersigned by the Rights
Agent and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Rights Certificates, nevertheless, may be countersigned by
the Rights Agent and issued and delivered by the Company with the same
force and effect as though the Person who signed such Rights Certificates
had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any Person who, at
the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at
the date of the execution of this Rights Agreement any such Person was not
such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates issued hereunder or
transfer, books for registration and transfer of the Rights Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the date of
each of the Rights Certificates.
<PAGE> 34
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. (a)
Subject to the provisions of Section 4(b), Section 7(e) and Section 14
hereof, at any time after the Close of Business on the Distribution Date,
and at or prior to the Close of Business on the Expiration Date, any Rights
Certificate or Certificates (except as otherwise provided herein,
including, without limitation, Rights Certificates representing Rights that
have become null and void and nontransferable pursuant to Section 7(e) of
this Agreement or that have been exchanged pursuant to Section 24 hereof)
may be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase a
like number of one one-hundredths of a share of Preferred Stock (or,
following a Triggering Event, Common Stock, other securities, cash or other
assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Rights Certificate or Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender
the Rights Certificate or Certificates to be transferred, split up,
combined or exchanged at the principal office or offices of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the registered
holder shall have completed and signed the certificate contained in the
form of assignment on the reverse side of such Rights Certificate and shall
have provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request. Thereupon the Rights Agent shall,
subject to Section 4(b), Section 7(e) and Section 14 hereof, countersign
and deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and,
at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if mutilated, the
Company will execute and deliver a new Rights Certificate of like tenor to
the Rights Agent for countersignature and delivery to the registered holder
in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein), in whole or in part, at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form
<PAGE> 35
of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the principal office or offices of
the Rights Agent designated for such purpose, together with payment of the
aggregate Purchase Price (as adjusted in accordance with the terms of this
Agreement) with respect to the total number of one one-hundredths of a
share of Preferred Stock (or other securities, cash or other assets, as the
case may be) as to which such surrendered Rights are exercised, at or prior
to the earlier of (i) the Close of Business on November 7, 2006 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof or (iii) the time at which the Rights are
exchanged as provided in Section 24 hereof (the earliest of (i), (ii) and
(iii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be
$80.00, shall be subject to adjustment from time to time as provided in
Section 11 or 13 or 24 hereof and shall be payable in accordance with
Section 7(c) hereof.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment, with respect to each Right so exercised,
of the Purchase Price for the shares to be purchased as set forth below and
an amount equal to any applicable transfer tax required to be paid by the
holder of such Rights Certificate, in accordance with Section 6 hereof by
certified check, cashier's check or money order payable to the order of the
Company, the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i) (A) requisition from any transfer agent of the shares of
Preferred Stock (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the total number of one
one-hundredths of a share of Preferred Stock to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) if the Company, in its sole discretion, shall have
elected to deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder into a depositary, requisition from
the depositary agent depositary receipts representing such number of one
one-hundredths of a share of Preferred Stock as are to be purchased (in
which case certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company will direct the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of
cash, if any, to be paid in lieu of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) when appropriate, after
receipt thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the Purchase
Price (as such amount may be reduced pursuant to Section 11(a)(iii) or 24
hereof) shall be made in cash or by certified bank check or bank draft
payable to the order of the Company. In the event that the Company is
obligated or elects to issue other securities (including Common Stock) of
the Company, pay cash and/or distribute other property pursuant to Section
11(a) or 24 hereof, the Company will make all arrangements necessary so
<PAGE> 36
that such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate. The Company
reserves the right to require prior to the occurrence of a Triggering Event
that, upon any exercise of Rights, a number of Rights be exercised so that
only whole shares of Preferred Stock would be issued. In addition, in the
case of an exercise of Rights by a holder pursuant to Section 11(a)(ii),
the Rights Agent shall return such Rights Certificate to the registered
holder thereof after imprinting, stamping or otherwise indicating thereon
that the Rights represented thereby no longer include the Rights provided
by Section 11(a)(ii) of the Rights Agreement and if less than all the
Rights represented by such Rights Certificate were so exercised, the Rights
Agent shall indicate on the Rights Certificate the number of Rights
represented thereby which continue to include the rights provided by
Section 11(a)(ii).
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon
the order of, the registered holder of such Rights Certificate or to his or
her duly authorized assigns, subject to the provisions of Section 14
hereof, or the Rights Agent shall place an appropriate notation on the
Rights Certificate with respect to those Rights exercised.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate
of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board of Directors has determined is part of a
plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 7(e), shall become null and void without any
further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. The Company may require (or cause the
Rights Agent or any transfer agent of the Company to require) any Person
who submits a Rights Certificate (or a certificate representing shares of
Stock that evidences, or but for the provisions of this Section 7(e) would
evidence, Rights) for transfer on the registry books or to exercise the
Rights represented thereby to establish to the satisfaction of the Company
in its sole discretion that such Rights have not become null and void
pursuant to the provisions of this Section 7(e).
<PAGE> 37
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or
any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all cancelled Rights Certificates
to the Company, or shall, at the written request of the Company, destroy
such cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock
(and, following the occurrence of a Triggering Event, out of its authorized
and unissued shares of Common Stock and/or other securities or out of its
authorized and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) that, as provided in this Agreement,
including Section 11(a)(iii) hereof, will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, shares of the Company's Common Stock
and/or other securities) issuable upon the exercise of the Rights may be
listed on any national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable
(but only to the extent that it is reasonably likely that the Rights will
be exercised), all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
<PAGE> 38
(c) If required by applicable law, the Company shall use its best
efforts to (i) file, as soon as practicable following the earliest date
after the first occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the Rights
has been determined in accordance with Section 11(a)(iii) hereof or Rights
are to be exchanged in accordance with Section 24 hereof, a registration
statement under the Act, with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act and the rules
and regulations thereunder) until the earlier of (A) the date as of which
the Rights are no longer exercisable for such securities, and (B) the date
of the expiration of the Rights. The Company will also take such action as
may be appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the exercisability
of the Rights. The Company may temporarily suspend, for a period of time
not to exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the exercisability of the Rights
in order to prepare and file such registration statement and permit it to
become effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. In addition, if the Company shall
determine that a registration statement is required following the
Distribution Date, the Company may temporarily suspend the exercisability
of the Rights until such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained, the
exercise thereof shall not be permitted under applicable law or a
registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all one one-hundredths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event,
shares of the Company's Common Stock and/or other securities) delivered
upon exercise of Rights shall, at the time of delivery of the certificates
for such shares or other securities (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable shares or securities.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all U.S. federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of one one-hundredths of
a share of Preferred Stock (or shares of the Company's Common Stock and/or
other securities, as the case may be) upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax which may
be payable in respect of any transfer or delivery of Rights Certificates to
a Person other than, or the issuance or delivery of a number of one
one-hundredths of a share of Preferred Stock (or shares of the Company's
Common Stock and/or other securities, as the case may be) in a name other
<PAGE> 39
than that of, the registered holder of the Rights Certificates evidencing
Rights surrendered for exercise, or to issue or deliver any certificates or
depositary receipts for a number of one one-hundredths of a share of
Preferred Stock (or shares of the Company's Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid
(any such tax being payable by the holder of such Rights Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for a number of one one-hundredths of a share of Preferred
Stock (or shares of the Company's Common Stock and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of such fractional
shares of Preferred Stock (or shares of the Company's Common Stock and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase
Price (and all applicable transfer taxes) was made; provided, however, that
if the date of such surrender and payment is a date upon which the
Preferred Stock (or shares of the Company's Common Stock and/or other
securities, as the case may be) transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock (or shares of the
Company's Common Stock and/or other securities, as the case may be)
transfer books of the Company are open.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered
by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock,
(C) combine the outstanding Preferred Stock into a smaller number of
shares, or (D) issue any shares of its capital stock in a reclassification
of the Preferred Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section 11(a)
and Section 7(e) hereof, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of
Preferred Stock or capital stock, as the case may be, issuable on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case may be, which, if such Right
had been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, such holder would
<PAGE> 40
have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon exercise
of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. If an event
occurs which would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in the event
any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company,
or any Person or entity organized, appointed or established by the Company
for or pursuant to the terms of any such plan) alone or together with its
Affiliates and Associates, shall become an Acquiring Person, unless the
event causing such Person to become an Acquiring Person is a transaction
set forth in Section 13(a) hereof, each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the right
to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to such
event regardless of whether or not the Right was then exercisable, in
accordance with the terms of this Agreement and in lieu of a number of one
one-hundredths of a share of Preferred Stock, such number of shares of
Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of one
one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, and dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase Price" for
each Right and for all purposes of this Agreement) by (y) 50% of the
Current Market Price (determined pursuant to Section 11(d) hereof) per
share of the Company's Common Stock on the date of such first occurrence
(such number of shares, the "Adjustment Shares").
(iii) In the event that there shall not be sufficient treasury
shares or authorized but unissued (and reserved) shares of the Company's
Common Stock to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii) of this Section ll(a), the Company shall (A)
determine the excess of (1) the value of the Adjustment Shares issuable
upon the exercise of a Right determined as set forth below (the "Current
Value") over (2) the Purchase Price (such excess, the "Spread"), and (B)
with respect to each Right (subject to Section 7(e) hereof) make adequate
provision to substitute for the Adjustment Shares, upon the exercise of a
Right and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation, shares, or units
of shares, of preferred stock, such as the Preferred Stock, which the Board
of Directors has deemed to have essentially the same value or economic
rights as shares of the Company's Common Stock (such shares of preferred
stock being referred to as "Common Stock Equivalents")), (4) debt
<PAGE> 41
securities of the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value (less the
amount of any reduction in the Purchase Price) where such aggregate value
has been determined by the Board of Directors based upon the advice of a
nationally recognized investment banking firm selected by the Board of
Directors; provided, however, that if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above within
thirty (30) days following the occurrence of a Section 11(a)(ii) Event (the
"Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of the Company's Common Stock (to the
extent available) and then, if necessary, cash, which shares and/or cash
have an aggregate value equal to the Spread. If the Board of Directors
determines in good faith that it is likely that sufficient additional
shares of the Company's Common Stock could be authorized for issuance upon
exercise in full of the Rights, the thirty (30) day period set forth above
may be extended to the extent necessary, but not more than ninety (90) days
after the Section 11(a)(ii) Trigger Date, in order that the Company may
seek stockholder approval for the authorization of such additional shares
(such thirty (30) day period, as it may be extended, is herein called the
"Substitution Period"). To the extent that action is to be taken pursuant
to the first and/or second sentences of this Section 11(a)(iii), the
Company (1) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (2) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek such stockholder approval for such authorization of
additional shares and/or to decide the appropriate form of distribution to
be made pursuant to such first sentence and to determine the value thereof.
In the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the Current Value of each Adjustment Share shall be the Current Market
Price per share of the Company's Common Stock on the Section 11(a)(ii)
Trigger Date and the per share or per unit value of any Common Stock
Equivalent shall be deemed to equal the Current Market Price per share of
the Company's Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling
them to subscribe for or purchase (for a period expiring within forty-five
(45) calendar days after such record date) Preferred Stock (or shares
having the same rights, privileges and preferences as the shares of
Preferred Stock ("equivalent preferred stock")) or securities convertible
into Preferred Stock or equivalent preferred stock at a price per share of
Preferred Stock or per share of equivalent preferred stock (or having a
conversion price per share, if a security convertible into Preferred Stock
or equivalent preferred stock) less than the Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock
on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
<PAGE> 42
shall be the number of shares of Preferred Stock outstanding on such record
date plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock and/or
equivalent preferred stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price, and the denominator of which shall
be the number of shares of Preferred Stock outstanding on such record date
plus the number of additional shares of Preferred Stock and/or equivalent
preferred stock to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be paid upon
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. In case
such subscription price may be paid by delivery of consideration part or
all of which may be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the holders
of the Rights. Shares of Preferred Stock owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, cash
(other than a regular quarterly cash dividend), assets (other than a
dividend payable in Preferred Stock, but including any dividend payable in
stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price
to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock
on such record date, less the fair market value (as determined in good
faith by the Board of Directors, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one share of Preferred Stock and the
denominator of which shall be such Current Market Price (as determined
pursuant to Section 11(d) hereof) per share of the Preferred Stock;
provided, however, that in no event shall the consideration paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is
fixed, and in the event that such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would have been in
effect if such record date had not been fixed.
<PAGE> 43
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price (as defined below) per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such
Common Stock for the thirty (30) consecutive Trading Days (as defined
below) immediately prior to such date, and for purposes of computations
made pursuant to Section 11(a)(iii) hereof, the Current Market Price per
share of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided,
however, that in the event that the Current Market Price per share of the
Common Stock is determined during a period following the announcement by
the issuer of such Common Stock of (A) a dividend or distribution on such
Common Stock payable in shares of such Common Stock or securities
convertible into shares of such Common Stock (other than the Rights) or (B)
any subdivision, combination or reclassification of such Common Stock, and
the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification shall not have
occurred prior to the commencement of the requisite 30 Trading Day or ten
Trading Day period, as set forth above, then, and in each such case, the
Current Market Price shall be appropriately adjusted to reflect the Current
Market Price per share equivalent if such Common Stock take into account
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common Stock
are not listed or admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the
shares of Common Stock are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional market
maker making a market in the Common Stock selected by the Board of
Directors. If on any such date no market maker is making a market in the
Common Stock, the fair value of such shares on such date as determined in
good faith by the Board of Directors shall be used. The term "Trading Day"
shall mean a day on which the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading is open
for the transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly held or not so listed or
traded, Current Market Price per share shall mean the fair value per share
as determined in good faith by the Board of Directors, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
<PAGE> 44
(ii) For the purpose of any computation hereunder, the Current
Market Price per share of Preferred Stock (or any other security, for
which the Current Market Price must be determined) shall be determined in
the same manner as set forth above for the Common Stock in clause (i) of this
Section 11(d) (other than (solely in the case of the Preferred Stock) the
last sentence thereof). If the Current Market Price per share of Preferred
Stock cannot be determined in the manner provided above or if the Preferred
Stock is not publicly held or listed or traded in a manner described in
clause (i) of this Section 11(d), the Current Market Price per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 100
(as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common
Stock occurring after the date of this Agreement) multiplied by the Current
Market Price per share of the Common Stock (as determined in accordance
with Section 11(d)(i)). If neither the Common Stock nor the Preferred Stock
is publicly held or so listed or traded, Current Market Price per share of
the Preferred Stock shall mean the fair value per share as determined in
good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive and binding for all purposes. For all purposes of this
Agreement, the Current Market Price of one one-hundredth of a share of
Preferred Stock shall be equal to the Current Market Price of one share of
Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest ten-thousandth of a
share of Common Stock or other share or one-millionth of a share of
Preferred Stock, as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Preferred
Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions with respect to the Preferred Stock
contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m)
and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to
the Preferred Stock shall apply on like terms to any such other shares.
<PAGE> 45
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths
of a share of Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number
of one one-hundredths of a share of Preferred Stock (calculated to the
nearest one-millionth) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained
by the Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one one-hundredths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be
exercisable for the number of one one-hundredths of a share of Preferred
Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one-ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Rights Certificates have been issued, shall be
at least ten (10) days later than the date of the public announcement. If
Rights Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company,
new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner
<PAGE> 46
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a share of Preferred Stock issuable
upon the exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of one one-hundredths of a share
which were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then stated value, if any, of the number of
one one-hundredths of a share of Preferred Stock issuable upon exercise of
the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable such number of one
one-hundredths of a share of Preferred Stock at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such
record date the number of one one-hundredths of a share of Preferred Stock
and other capital stock or securities of the Company, if any, issuable upon
such exercise over and above the number of one one-hundredths of a share of
Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that in its sole discretion it shall determine to be
advisable in order that any (i) consolidation or subdivision of the
Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred
Stock at less than the current market price, (iii) issuance wholly for cash
of shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in
this Section 11, hereafter made by the Company to holders of its Preferred
Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), (ii) merge with or into any other Person (other than
a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell
or transfer), in one transaction, or a series of related transactions,
<PAGE> 47
assets or earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its Subsidiaries in
one or more transactions each of which complies with Section 11(o) hereof),
if (x) at the time of or immediately after such consolidation, merger, sale
or transfer there are any charter or by-law provisions or any rights,
warrants or other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or
sale, the shareholders of the Person who constitutes, or would constitute,
the "Principal Party" for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or any of
its Affiliates and Associates. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company
and such other Person shall have executed and delivered to the Rights Agent
a supplemental agreement evidencing compliance with this Section 11(n).
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23, Section 24 or Section
27 hereof, take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that such action
will diminish substantially or otherwise eliminate the benefits intended to
be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare or pay a
dividend on its outstanding shares of Common Stock or Convertible Preferred
Stock payable in shares of its Common Stock or (ii) subdivide, combine or
consolidate its outstanding shares of Common Stock or Convertible Preferred
Stock (by reclassification or otherwise other than by payment of dividends
in its Common Stock), into a greater or smaller number of shares, then in
any such case, the number of Rights associated with each share of its
Common Stock or Convertible Preferred Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated
with each such share following any such event shall equal the result
obtained by multiplying the number of Rights associated with each such
share immediately prior to such event by a fraction the numerator which
shall be the total number of shares, in the case of the Common Stock, of
Common Stock, and, in the case of the Convertible Preferred Stock, of
Convertible Preferred Stock, outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total
number of, in the case of the Common Stock, shares of Common Stock, and, in
the case of the Convertible Preferred Stock, of Convertible Preferred
Stock, outstanding immediately following the occurrence of such event.
<PAGE> 48
(q) The exercise of Rights under Section 11(a)(ii) shall only result
in the loss of rights under Section 11(a)(ii) to the extent so exercised
and shall not otherwise affect the rights represented by the Rights under
this Agreement, including the rights represented by Section 13.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 and
Section 13 hereof, the Company shall (a) promptly prepare a certificate
setting forth such adjustment, and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights Agent,
and with each transfer agent for the Preferred Stock, the Company's Common
Stock and the Convertible Preferred Stock, a copy of such certificate, and
(c) mail a brief summary thereof to each holder of a Rights Certificate
(or, if prior to the Distribution Date, to each holder of a certificate
representing shares of the Stock) in accordance with Section 25 hereof. The
Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained and shall not be deemed to have
knowledge of such adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. In the event that, directly or r indirectly, at any time
after a Person has become an Acquiring Person, (x) the Company shall
consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section
11(o) hereof) and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction which complies with Section
11(o) hereof) shall consolidate with, or merge with or into, the Company,
and the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of the Stock shall be changed
into or exchanged for stock or other securities of any other Person or cash
or any other property, or (z) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer), in
one transaction or a series of related transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or Persons
(other than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof), then, and
in each such case (except as provided by Section 13(d) hereof), proper
provision shall be made so that: (i) each holder of a Right, except as
provided in Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price
multiplied by the number of one one-hundredths of a share of Preferred
Stock for which a Right was exercisable immediately prior to such event
regardless of whether or not the Right was then exercisable, in accordance
with the terms of this Agreement and in lieu of a number of one
one-hundredths of a share of Preferred Stock, such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable
shares of Common Stock of the Principal Party (as hereinafter defined,
(including, without limitation, the Company as successor thereto or the
surviving corporation)) not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the number
of one one-hundredths of a share of Preferred Stock for which a Right is
<PAGE> 49
exercisable immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such one
one-hundredths of a share for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase
Price in effect immediately prior to such first occurrence), and dividing
that product (which, following the first occurrence of a Section 13 Event,
shall be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by (2) 50% of the Current Market Price
(determined pursuant to Section 11(d)(i) hereof) per share of the Common
Stock of such Principal Party on the date of consummation of such Section
13 Event; (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the Rights; and
(v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a),
the Person that is the issuer of any securities
into which shares of Common Stock of the Company
are converted in such merger or consolidation, and
if no securities are so issued, the Person that is
the other party to such merger or consolidation;
and
(ii) in the case of any transaction described
in clause (z) of the first sentence of Section
13(a), the Person that is the party receiving the
greatest portion of the assets or earning power
transferred pursuant to such transaction or
transactions;
provided, however, that in any such case, (1) if the Common Stock
of such Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of another
<PAGE> 50
Person the Common Stock of which is and has been so registered, "Principal
Party" shall refer to such other Person; (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common
Stocks of two or more of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the issuer of the Common
Stock having the greatest aggregate market value; and (3) in case such
Person is owned, directly or indirectly, by a joint venture formed by two
or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such
party were a "Subsidiary" of both or all of such joint venturers and the
Principal Parties in each such chain shall bear the obligations set forth
in this Section 13 in the same ratio as their direct or indirect interests
in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number
of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in Sections
13(a) and (b) and further providing that, as soon as practicable after the
date of any consolidation, merger or sale of assets mentioned in Section
13(a), the Principal Party will
(i) prepare and file a registration statement under
the Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights
on an appropriate form, and will use its best
efforts to cause such registration statement to
(A) become effective as soon as practicable after
such filing and (B) remain effective (with a
prospectus at all times meeting the requirements
of the Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise
of the Rights under the blue sky laws of such
jurisdictions as may be necessary or appropriate;
and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and
each of its Affiliates which comply in all respects
with the requirements for registration on Form 10
under the Exchange Act.
<PAGE>51
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. In the event that a Section
13 Event shall occur at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p) hereof, or to distribute
Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price of
the Rights for any day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the Rights are
not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading, or if the Rights are
not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ or such
other system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors. If on any such date no such market
maker is making a market in the Rights the fair value of the Rights on such
date as determined in good faith by the Board of Directors shall be used.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Preferred
Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock). Fractions of shares of
Preferred Stock in integral multiples of one one-hundredth of a share of
Preferred Stock may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the
Company and a depositary selected by it; provided that such agreement shall
provide that the holders of such depositary receipts shall have the rights,
privileges and preferences to which they are entitled as beneficial owners
<PAGE> 52
of the Preferred Stock represented by such depositary receipts. In lieu of
fractional shares of Preferred Stock that are not integral multiples of one
one-hundredth of a share of Preferred Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction
of the current market value of one one-hundredth of a share of Preferred
Stock. For purposes of this Section 14(b), the current market value of one
one-hundredth of a share of Preferred Stock shall be one one-hundredth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date
of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of shares of its Common Stock upon
exercise of the Rights or to distribute certificates which evidence
fractional shares of its Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of
one (1) share of Common Stock. For purposes of this Section 14(c), the
current market value of one share of Common Stock shall be the closing
price of one share of Common Stock (as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(d) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional share
upon exercise of a Right, except as permitted by this Section 14 (except as
provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Stock); and any registered holder of any Rights Certificate
(or, prior to the Distribution Date, of the Stock), without the consent of
the Rights Agent or of the holder of any other Rights Certificate (or,
prior to the Distribution Date, of the Stock), may, in his own behalf and
for his own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Agreement and shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened violations of
the obligations hereunder of any Person subject to this Agreement.
Agreement of Rights Holders. Every holder of a Right by accepting the same
consents and agrees with the Company and the Rights Agent and with every
other holder of a Right that:
<PAGE> 53
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer
and with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the Rights Certificates or the associated Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to the last sentence
of Section 7(e) hereof, shall be required to be affected by any notice to
the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or a beneficial interest in a Right or other Person as a
result of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or other
order, decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, the Company must use its best efforts
to have any such order, decree or ruling lifted or otherwise overturned as
soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or other distributions or be deemed for any purpose the
holder of the number of one one-hundredths of a share of Preferred Stock or
any other securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon
the holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except
as provided in Section 25 hereof), or to receive dividends or other
distributions or to exercise any preemptive or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.
<PAGE> 54
Section 19. Concerning the Rights Agent. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights
Agent in connection with the acceptance and administration of this
Agreement, including the reasonable costs and expenses of defending against
any claim of liability in the premises. The indemnity provided for herein
shall survive the expiration of the Rights and the termination of this
Agreement.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
Rights Certificate or certificate for Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to
be signed, executed and, where necessary, verified or acknowledged, by the
proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto; provided,
however, that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case
at the time such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
<PAGE> 55
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes only
those duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company) and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and
the determination of "Current Market Price") be proved or established by
the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates) but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any change in the
exercisability of Rights (including the Rights becoming void pursuant to
Section 7(e) hereof) or any adjustment required under the provisions of
<PAGE> 56
Section 11 or Section 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise
of Rights evidenced by Rights Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common
Stock or Preferred Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for
any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer or for any delay in acting while
waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct; provided, reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is
not reasonably assured to it.
<PAGE> 57
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting
with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company,
and to each transfer agent of the Company's Common Stock, the Convertible
Preferred Stock and the Preferred Stock, by registered or certified mail,
and to the holders of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of
the Company's Common Stock, the Convertible Preferred Stock and the
Preferred Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to
make such appointment within a period of thirty (30) days after giving
notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Rights Certificate (who shall, with such notice, submit
his Rights Certificate for inspection by the Company), then any registered
holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be
a corporation organized and doing business under the laws of the United
States or of the State of Delaware (or of any other state of the United
States so long as such corporation is authorized to do business as a
banking institution in the State of New York) in good standing, having a
principal office in the State of New York, which is authorized under such
laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at
the time of its appointment as Rights Agent a combined capital and surplus
of at least $50,000,000. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or
deed; but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Company's Common
Stock, the Convertible Preferred Stock and the Preferred Stock, and mail a
notice thereof in writing to the registered holders of the Rights
<PAGE> 58
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights
in such form as may be approved by the Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class
of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration
of the Rights, the Company (a) shall, with respect to shares of Common
Stock so issued or sold pursuant to the exercise of stock options,
convertible securities, or warrants, including, without limitation,
pursuant to the conversion of the Convertible Preferred Stock, the
conversion of the Company's 4-7/8 Convertible Subordinated Debentures due
2005 and the Company's Class B Warrants, or under any employee plan or
arrangement, granted or awarded as of the Distribution Date, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate
by the Board of Directors, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if,
and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if,
and to the extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
Section 23. Redemption and Termination. (a) The Board of Directors
may, at its option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being hereinafter referred to
as the "Redemption Price"). The Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock (based on the Current
Market Price, as defined in Section 11(d)(i) hereof, of the Common Stock at
the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights pursuant to Section 23(a) hereof, evidence of
which shall have been filed with the Rights Agent and without any further
action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be
to receive the Redemption Price for each Right so held. The Company shall
promptly give public notice of any such redemption; provided, however, that
<PAGE> 59
the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after such action of the Board
of Directors ordering the redemption of the Rights, the Company shall
deliver a notice of such redemption to the Rights Agent and mail a notice
of such redemption to all holders of the then outstanding Rights at their
last addresses as they appear upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the Transfer
Agent for the Company's Common Stock and the Convertible Preferred Stock.
Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption
Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time
in any manner other than that specifically set forth in this Section 23 or
Section 24 hereof, and other than in connection with the purchase of the
Stock prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all or
part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for shares of the Company's Common Stock at an exchange ratio
of one share of the Company's Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any such Subsidiary,
or any Person or entity organized, appointed or established by the Company
for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of
50% or more of the Company's Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to Section 24(a) and without any further
action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be
to receive that number of shares of the Company's Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the
shares of the Company's Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
<PAGE> 60
(c) In the event that there shall not be sufficient shares of the
Company's Common Stock issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance
with this Section 24, the Company shall take all such action as may be
necessary to authorize additional Common Stock for issuance upon exchange
of the Rights. In the event the Company shall, after good faith effort, be
unable to take all such action as may be necessary to authorize such
additional Common Stock, the Company shall substitute, for each share of
Common Stock that would otherwise be issuable upon exchange of a Right, a
number of shares of Preferred Stock or fraction thereof such that the
Current Market Price of one share of Preferred Stock multiplied by such
number or fraction is equal to the Current Market Price of one share of
Common Stock as of the date of issuance of such share of Preferred Stock or
fraction thereof.
(d) The Company shall not be required to issue fractions of a share of
its Common Stock or to distribute certificates which evidence fractional
shares. In lieu of such fractional shares, the Company shall pay to the
registered holders of the Rights Certificate with regard to which such
fractional shares would otherwise be issuable an amount in cash equal to
the same fraction of the Current Market Value of a share of Common Stock.
For the purposes of this Section 24(d), the Current Market Value of a share
of Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make
any other distribution to the holders of Preferred Stock (other than a
regular quarterly cash dividend), (ii) to offer to the holders of Preferred
Stock rights or warrants to subscribe for or to purchase any additional
shares of Preferred Stock or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), (iv) to effect any
consolidation or merger into or with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), or to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer), in one
transaction or a series of related transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give
to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of such proposed action and
file a certificate with the Rights Agent to that effect, which shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any such date
<PAGE> 61
is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least ten (10) days prior to the
record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least
ten (10) days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of the shares of Preferred
Stock whichever shall be the earlier.
(b) In case a Section 11(a)(ii) Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance
with Section 26 hereof, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) hereof, and (ii) all references in Section
25(a) to Preferred Stock shall be deemed thereafter to refer to the
Company's Common Stock and/or, if appropriate, other securities of the
Company.
Section 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
U.S. Home Corporation
1800 West Loop South
Houston, Texas 77027
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
First Chicago Trust Company of New York
Suite 4660, 525 Washington Boulevard
Jersey City, New Jersey 07310
Attention: Tenders & Exchanges Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate
(or, if prior to the Distribution Date, to the holder of certificates
representing shares of Stock) shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed to such holder at the address
of such holder as shown on the registry books of the Company.
<PAGE> 62
Section 27. Supplements and Amendments. The Company may from time to
time supplement or amend this Agreement without the approval of any holders
of the Rights Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other
provisions with respect to the Rights which the Company may deem necessary
or desirable, any such supplement or amendment to be evidenced by a writing
signed by the Company and the Rights Agent; provided, however, that from
and after such time as any Person becomes an Acquiring Person, this
Agreement shall not be amended in any manner which would adversely affect
the interests of the holders of the Rights.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc.
The Board of Directors shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors or to the Company, or as may
be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including
a determination to redeem or not redeem the Rights or to amend this
Agreement and whether any proposed amendment adversely affects the
interests of the holders of Rights Certificates). All such actions,
calculations, interpretations and determinations (including, for purposes
of clause (y) below, all omissions with respect to the foregoing) which are
done or made by the Board of Directors in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board of Directors to
any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to
the Distribution Date, registered holders of the Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to
the Distribution Date, registered holders of the Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated.
<PAGE> 63
Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to
contracts made and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
U.S. HOME CORPORATION
By: /s/ Kelly Somoza
----------------------
Name: Kelly Somoza
Title: Vice President
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By: /s/ James Kuzmich
------------------------
Name: James Kuzmich
Title: Operations Officer
<PAGE> 64
TABLE OF CONTENTS
Page No.
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 6
Section 3 Issue of Rights Certificates 7
Section 4. Form of Rights Certificates 8
Section 5. Countersignature and Registration 9
Section 6. Transfer, Split Up, Combination
and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen
Rights Certificates 9
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 10
Section 8. Cancellation and Destruction of
Rights Certificates 12
Section 9. Reservation and Availability of
Capital Stock 13
Section 10. Preferred Stock Record Date 14
Section 11 Adjustment of Purchase Price, Number
and Kind of Shares or Number
of Rights 15
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares 23
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or
Earning Power 23
Section 14. Fractional Rights and Fractional
Shares 25
Section 15. Rights of Action 27
Section 16. Agreement of Rights Holders 27
Section 17. Rights Certificate Holder Not
Deemed a Stockholder 28
<PAGE> 65
Section 18. Concerning the Rights Agent 28
Section 19. Merger or Consolidation or
Change of Name of Rights Agent 28
Section 20. Duties of Rights Agent 29
Section 21. Change of Rights Agent 31
Section 22. Issuance of New Rights Certificates 32
Section 23. Redemption and Termination 32
Section 24. Exchange 33
Section 25. Notice of Certain Events 34
Section 26. Notices 35
Section 27. Supplements and Amendments 35
Section 28. Successors 36
Section 29. Determinations and Actions by
the Board of Directors, etc. 36
Section 30. Benefits of this Agreement 36
Section 31. Severability 36
Section 32. Governing Law 36
Section 33. Counterparts 36
Section 34. Descriptive Headings 37
<PAGE> 66
EXHIBIT 4-A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR NON-CUMULATIVE PREFERRED STOCK
of
U.S. HOME CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Robert J. Strudler, Chairman and Co-Chief Executive
Officer, and Richard G. Slaughter, Vice President - Planning and Secretary,
of U.S. Home Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), in
accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the
Corporation's Board of Directors (the "Board of Directors") by the Restated
Certificate of Incorporation, as amended, of the Corporation (the
"Certificate of Incorporation"), the Board of Directors on November 7, 1996
adopted by resolution this Certificate of Designation creating a series of
500,000 shares of Preferred Stock designated as Series A Junior
Non-Cumulative Preferred Stock:
Pursuant to the authority vested in the Board of
Directors in accordance with the provisions of the Certificate of
Incorporation, a series of Preferred Stock of the Corporation be and it
hereby is created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Non-Cumulative Preferred Stock," $.10 par
value per share, and the number of shares constituting such series shall be
500,000. Such number of shares may be increased or decreased by the Board
of Directors; provided, that no decrease shall reduce the number of shares
of Series A Junior Non-Cumulative Preferred Stock to a number less than the
number of shares outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series A Junior Non-Cumulative Preferred Stock.
<PAGE> 67
2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock, including specifically holders of
shares of the Corporation's Convertible Redeemable Preferred Stock, $.10
par value per share (the "Convertible Preferred Stock"), ranking prior and
superior to the shares of Series A Junior Non-Cumulative Preferred Stock
with respect to dividends, holders of record of the Series A Junior
Non-Cumulative Preferred Stock will be entitled to receive if, when, and as
declared by the Board of Directors, but only out of funds legally available
for the payment of cash dividends under the laws of the State of Delaware,
quarterly dividends payable on the last day of March, June, September and
December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series A Junior Non-Cumulative Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 or
(b) subject to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of Common
Stock, $.01 par value per share ("Common Stock"), or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), to
be declared on the Common Stock with respect to the immediately preceding
Quarterly Dividend Payment Date, or, in the case of the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of
a share of Series A Junior Non-Cumulative Preferred Stock. In the event the
Corporation shall at any time after November 7, 1996 (the "Rights
Declaration Date") (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of shares of Series A
Junior Non-Cumulative Preferred Stock were entitled immediately prior to
such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Junior Non-Cumulative Preferred Stock as provided in paragraph (A)
above immediately prior to the time when it declares a dividend or
distribution on the Common Stock (other than a dividend payable in shares
of Common Stock) and at no other time.
(C) Dividends on outstanding shares of Series A Junior Non-Cumulative
Preferred Stock will not be cumulative. Dividends paid on the shares of
Series A Junior Non-Cumulative Preferred Stock in an amount less than the
total amount of such dividends at the time declared on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the
time outstanding. Such dividends, if any, will be payable to holders of
record on the date fixed for such purpose by the Board of Directors in
advance of the payment of each such dividend.
<PAGE> 68
3. Voting Rights.
(A) The holders of the Series A Junior Non-Cumulative Preferred Stock,
voting together as a single class (except as otherwise provided herein or
by law) with the holders of the Convertible Preferred Stock and the holders
of the Common Stock, will have the right to vote on all matters requiring
action of the stockholders of the Corporation or submitted to such
stockholders for action, except when otherwise required by law.
(B) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Junior Non-Cumulative Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the number of votes per share to
which holders of shares of Series A Junior Non-Cumulative Preferred Stock
were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(C) In the event the Board of Directors declares a dividend on the
Series A Junior Non-Cumulative Preferred Stock, and the Corporation fails
to pay such dividend for six consecutive fiscal quarters ("Unpaid
Dividends") following the date of such declaration, the holders of the
outstanding shares of Series A Junior Non-Cumulative Preferred Stock,
voting as a single class, will be entitled, by written notice to the
Corporation given by the holders of a majority of the Series A Junior
Non-Cumulative Preferred Stock then outstanding or by ordinary resolution
passed by the holders of a majority of the Series A Junior Non-Cumulative
Preferred Stock then outstanding present in person or by proxy at a
separate general meeting of such holders convened for the purpose, to elect
two additional directors to the Board of Directors, to remove any such
directors from office and to elect persons in place of such directors. No
later than 30 days after such entitlement arises, if written notice by a
majority of the holders of the Series A Junior Non-Cumulative Preferred
Stock then outstanding has not been given as provided for in the preceding
sentence, the Board of Directors, or an authorized committee thereof, will
convene a separate general meeting for the foregoing purpose. In the event
the Board of Directors or such authorized committee fails to convene such
meeting within such 30-day period, the holders of 10 percent of the shares
of the Series A Junior Non-Cumulative Preferred Stock then outstanding will
be entitled to convene such meeting. The provisions of the Certificate of
Incorporation relating to the convening and conduct of Special Meetings (as
defined therein) will apply with respect to any such separate general
meeting. Directors elected as aforesaid will serve until the next Annual
Meeting (as defined in the Certificate of Incorporation). Upon the
Corporation having paid all Unpaid Dividends in full, the term of any
directors elected pursuant to this Section 3(C) will cease, and the number
of directors of the Corporation will automatically be decreased by two.
<PAGE> 69
(D) With respect to all matters upon which the holders of the Series A
Junior Non-Cumulative Preferred Stock, the Convertible Preferred Stock and
Common Stock may be entitled to vote, voting together as a single class,
such matters will require the affirmative vote of the holders of a majority
of the votes cast by the holders of the Series A Junior Non-Cumulative
Preferred Stock, the Convertible Preferred Stock and Common Stock entitled
to vote, voting together as a single class, except where a higher or lower
vote is required by (i) the General Corporation Law of the State of
Delaware, (ii) the provisions of the Certificate of Incorporation, (iii)
the provisions of the Corporation's Amended and Restated By-Laws or (iv)
the provisions of this Certificate of Designation, Preferences and Rights.
(E) Except as set forth herein, holders of Series A Junior
Non-Cumulative Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Convertible Preferred Stock and Common Stock as set
forth herein) for taking any corporate action.
4. Certain Restrictions.
For so long as any dividend declared on the Series A Junior
Non-Cumulative Preferred Stock is unpaid, the Corporation shall not
(i) declare or pay dividends on or make any other
distributions on any shares of stock ranking
junior (either as to dividends or upon
liquidation, dissolution or winding up) to the
Series A Junior Non-Cumulative Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a
parity (either as to dividends or upon
liquidation, dissolution or winding up) with the
Series A Junior Non-Cumulative Preferred Stock,
except dividends paid ratably on the Series A
Junior Non-Cumulative Preferred Stock and all such
parity stock on which dividends are payable or in
arrears in proportion to the total amounts to
which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior
Non-Cumulative Preferred Stock; provided that the
Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock
in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends
or upon dissolution, liquidation or winding up) to
the Series A Junior Non-Cumulative Preferred
Stock; or
<PAGE> 70
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Junior
Non-Cumulative Preferred Stock, or any shares of
stock ranking on a parity with the Series A Junior
Non-Cumulative Preferred Stock, except in
accordance with a purchase offer made in writing
or by publication (as determined by the Board of
Directors) to all holders of such shares upon such
terms as the Board of Directors, after
consideration of the respective annual dividend
rates and other relative rights and preferences of
the respective series and classes, shall determine
in good faith will result in fair and equitable
treatment among the respective series or classes.
5. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made (i) to the
holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior
Non-Cumulative Preferred Stock unless, prior thereto, the holders of shares
of Series A Junior Non-Cumulative Preferred Stock shall have received $100
per share, plus an amount equal to declared and unpaid dividends and
distributions thereon to the date of such payment; provided, that the
holders of shares of Series A Junior Non-Cumulative Preferred Stock shall
be entitled to receive an aggregate amount per share, subject to the
provision for adjustment as hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of shares of Common
Stock or (ii) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Non-Cumulative Preferred Stock, except distributions made
ratably on the Series A Junior Non-Cumulative Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up
(the "Series A Liquidation Preference").
(B) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock or (iii)
combine the outstanding Common Stock into a smaller number of shares, then
in each such case the aggregate amount to which holders of shares of Series
A Junior Non-Cumulative Preferred Stock were entitled immediately prior to
such event under the proviso in clause (i) of Section 5(A) shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
<PAGE> 71
(C) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of preferred stock, if
any, which rank on a parity with the Series A Junior Non-Cumulative
Preferred Stock, then such remaining assets shall be distributed ratably to
the holders of such parity shares in proportion to their respective
liquidation preferences.
(D) For the purpose hereof, the voluntary sale, lease, exchange or
transfer, whether for cash, stock, property or otherwise, of all or
substantially all or part of the Corporation's property or assets to, or a
consolidation or merger of the Corporation with or into, one or more other
corporations or partnerships, or the reduction of the Corporation's capital
stock, will not be deemed to be a liquidation, dissolution or winding up of
the Corporation.
6. Ranking
The Series A Junior Non-Cumulative Preferred Stock shall rank junior
to all other series of the Corporation's Preferred Stock and senior to the
Common Stock, as to the payment of dividends and the distribution of
assets, unless the terms of any such other stock shall provide otherwise.
7. Consolidation, Merger, etc.
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any
other property, then in any such case the shares of Series A Junior
Non-Cumulative Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A
Junior Non-Cumulative Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
8. No Redemption. The shares of Series A Junior Non-Cumulative Preferred
Stock shall not be redeemable.
9. Reacquired Shares.
Any shares of Series A Junior Non-Cumulative Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares
<PAGE> 72
of Preferred Stock and may be reissued as part of a new series of Preferred
Stock, subject to the conditions and restrictions on issuance set forth
herein, in the Certificate of Incorporation, or in any other Certificate of
Designation creating a series of Preferred Stock of the Corporation or any
similar stock or as otherwise required by law.
10. No Preemptive Rights
Holders of Series A Junior Non-Cumulative Preferred Stock will have no
preemptive rights to subscribe for or purchase additional shares of any
class of stock or other security of the Corporation.
11. Legends
In addition to any other legend required to be set forth on each
certificate representing Series A Junior Non-Cumulative Preferred Stock
pursuant to the Certificate of Incorporation or by law, each such
certificate will bear the following legend:
"U.S.HOME CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH HOLDER
OF THE SERIES A JUNIOR NON-CUMULATIVE PREFERRED STOCK WHO SO REQUESTS
THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL, OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OF U.S. HOME
CORPORATION OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS."
12. Amendment. The Certificate of Incorporation shall not be further
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Junior Non-Cumulative Preferred
Stock so as to affect them adversely without the affirmative vote of the
holders of a majority or more of the outstanding shares of Series A Junior
Non-Cumulative Preferred Stock, voting separately as a class.
13. Fractional Shares. Series A Junior Non-Cumulative Preferred Stock may
be issued in fractions of a share, which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of
all other rights of holders of Series A Junior Non-Cumulative Preferred Stock.
<PAGE> 73
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and
do affirm the foregoing as true under the penalties of perjury this
____ day of November, 1996.
----------------------------------
Robert J. Strudler
Chairman and Co-Chief
Executive Officer
(Corporate Seal)
Attest:
- ------------------------
Richard G. Slaughter
Vice President - Planning
and Secretary
<PAGE> 74
EXHIBIT 4-B
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER NOVEMBER 7, 2006 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
RIGHTS AGREEMENT.]
Rights Certificate
U.S. HOME CORPORATION
This certifies that , or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions
of the Rights Agreement, dated as of November 7, 1996 (the "Rights
Agreement"), between U.S. Home Corporation, a Delaware corporation (the
"Company"), and First Chicago Trust Company of New York (the "Rights
Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00
P.M. (New York City time) on November 7, 2006, unless the Rights evidenced
hereby shall have been previously redeemed by the Company or exchanged, at
the office or offices of the Rights Agent designated for such purpose, or
its successors as Rights Agent, one one-hundredth of a fully paid,
nonassessable share of Series A Junior Non-Cumulative Preferred Stock, $.10
par value per share (the "Preferred Stock"), of the Company, at a purchase
price of $80.00 per one one-hundredth of a share (the "Purchase Price"),
upon presentation and surrender of this Rights Certificate with the Form of
Election to Purchase and related Certificate duly executed. The Purchase
Price may be paid in cash or by certified bank check or money order payable
to the order of the Company. The number of Rights evidenced by this Rights
Certificate (and the number of one one-hundredths of a share of Preferred
Stock which may be purchased upon exercise hereof) set forth above, and the
Purchase Price per share set forth above, are the number and Purchase Price
as of November 7, 1996, based on the Preferred Stock as constituted at such
date.
<PAGE> 75
As provided in the Rights Agreement, the Purchase Price
and the number and kind of shares of Preferred Stock or other securities,
which may be purchased upon the exercise of the Rights evidenced by this
Rights Certificate are subject to modification and adjustment upon the
happening of certain events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights
Agreement are on file at the principal executive offices of the Company and
the above-mentioned office of the Rights Agent and are also available upon
written request to the Rights Agent.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced by this
Rights Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of an Acquiring Person
(or any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person become such, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of an Acquiring Person (or
any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such, such Rights shall
become null and void and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the
Rights Agent designated for such purpose, may be exchanged for another
Rights Certificate or Rights Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate number of one
one-hundredths of a share of Preferred Stock or other securities as the
Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Rights Certificate (i) may be redeemed by the
Company at its option at a redemption price of $.01 per Right or (ii) may
be exchanged in whole or in part for shares of Preferred Stock or the
Company's Common Stock, $.01 par value per share.
<PAGE> 76
No fractional shares of Preferred Stock will be issued
upon the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement. The Company reserves the right to require
prior to the occurrence of a Triggering Event (as such term is defined in
the Rights Agreement) that a number of Rights be exercised so that only
whole shares of Preferred Stock will be issued.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the
holder of shares of Preferred Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, to receive notice of meetings
or other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or other distributions or to exercise
any preemptive or subscription rights, or otherwise, until the Right or
Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the Rights Agent.
<PAGE> 77
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of _________ __, ____
ATTEST: U.S. HOME CORPORATION
______________________ By:______________________
Secretary Title:
Countersigned:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By_______________________
Authorized Signature
<PAGE> 78
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
______________________________________________ hereby sells, assigns and
transfers unto_________________________________
- ------------------------------------------------------
(Please print name and address of transferee)
- ---------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
____________________ Attorney, to transfer the within Rights Certificate on
the books of the within-named Company, with full power of substitution.
Please insert social security
or other identifying number ____________
- ------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------
Dated: ___________, __
---------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in a
Securities Transfer Association recognized signature guarantee program.
<PAGE> 79
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being sold, assigned or transferred by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights
Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement).
Dated: __________, ___ _______________________
Signature
Signature Guaranteed:
Signature must be guaranteed by a participant in a
Securities Transfer Association recognized signature guarantee program.
NOTICE
The signature on the foregoing Form of Assignment and
Certificate must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth in the Form of
Assignment is not completed, the Company and the Rights Agent will deem the
Beneficial Owner (as such term is defined in the Rights Agreement) of the
Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and, in case of an assignment, will affix a legend to that
effect on any Rights Certificate issued in exchange for this Rights
Certificate and any election to purchase Rights under such Rights
Certificate will not be honored.
<PAGE> 80
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if
such holder desires to exercise Rights
represented by the Rights Certificate.)
To Rights Agent:
The undersigned hereby irrevocably elects to exercise
__________ Rights represented by this Rights Certificate to purchase the
shares of Preferred Stock issuable upon the exercise of the Rights (or such
other securities of the Company or of any other person which may be
issuable upon the exercise of the Rights) and requests that certificates
for such shares be issued in the name of and delivered to:
Please insert social security
or other identifying number _________________________
- ------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate for the
balance of such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number __________________
- ------------------------------------------------------------------
(Please print name and address)
Dated: __________, ____
------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in a
Securities Transfer Association recognized signature guarantee program.
<PAGE> 81
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement).
Dated: __________, ____ _______________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in a
Securities Transfer Association recognized signature guarantee program.
<PAGE> 82
NOTICE
The signature on the foregoing Form of Election to
Purchase and Certificate must correspond to the name as written upon the
face of this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the
Form of Election to Purchase is not completed, the Company and the Rights
Agent will deem the Beneficial Owner (as such term is defined in the Rights
Agreement) of the Rights evidenced by this Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement) and such Election to Purchase will not be
honored.
<PAGE> 83
EXHIBIT 4-C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On November 7 , 1996, the Board of Directors (the "Board
of Directors") of U.S. Home Corporation (the "Company") adopted a rights
plan. In connection with the rights plan, the Board of Directors declared a
dividend distribution of one preferred stock purchase right ("Right") for
each outstanding share of the Company's Common Stock, $.01 par value per
share ("Common Stock"), and each outstanding share of the Company's
Convertible Redeemable Preferred Stock, $.10 par value per share (the
"Convertible Preferred Stock" and, collectively with the Common Stock, the
"Stock"). The dividend is payable to holders of Stock of record on December
4, 1996 (the "Record Date"). Each Right, when it becomes exercisable,
entitles the registered holder to purchase from the Company at any time
following the Distribution Date (as defined below) and prior to the
occurrence of a Triggering Event (as defined below) a unit consisting of
one one-hundredth of a share (a "Unit") of the Company's Series A Junior
Non-Cumulative Preferred Stock, $.10 par value per share (the "Preferred
Stock"), at a price of $80.00 per Unit, subject to adjustment (the
"Purchase Price"). The description and terms of the Rights are set forth in
a Rights Agreement, dated as of November 7, 1996 (the "Rights Agreement"),
between the Company and First Chicago Trust Company of New York, as Rights
Agent.
Until the earlier to occur of (i) 10 days after the date
on which there is a public announcement that (a) a person or group of
affiliated or associated persons (other than a person who is and continues
at all times to be eligible under Rule 13d-1 under the Securities Exchange
Act of 1934 as in effect on the date of the Rights Agreement to file a
Schedule 13G with respect to its ownership of the Common Stock (an
"Institutional Stockholder")) has acquired, or has the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of Common
Stock or (b) an Institutional Stockholder, including its affiliates and
associates, has acquired or has the right to acquire beneficial ownership
of 20% or more of the outstanding shares of Common Stock (any person
described in clause (a) or (b) being referred to as an "Acquiring Person"),
or (ii) 10 business days (or such later date as the Board of Directors
shall determine prior to such time as any person or group of affiliated
persons becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender or exchange offer the
consummation of which would result in a person or group of affiliated
persons beneficially owning 15% or more of the then outstanding shares of
Common Stock (including any such date which is after the date of the Rights
Agreement and prior to the issuance of the Rights; the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced,
with respect to any share of Stock outstanding as of the Record Date, by
the certificate for such Stock with a copy of this Summary of Rights
attached thereto.
<PAGE> 84
Until the Distribution Date (or earlier redemption or
expiration of the Rights), (i) the Rights will be transferred with and only
with the shares of Stock, (ii) new Stock certificates issued after the
Record Date upon transfer or issuance of Stock will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Stock outstanding, even without such
notation or copy of this Summary of Rights being attached thereto, will
also constitute the transfer of the Rights associated with the Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Stock as of the
close of business on the Distribution Date and such separate Rights
Certificates alone will represent the Rights. Pursuant to the Rights
Agreement, the Company reserves the right to require prior to the
occurrence of a Triggering Event (as defined below) that, upon any exercise
of Rights, a number of Rights be exercised so that only whole shares of
Preferred Stock will be issued.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on November 7, 2006 (the
"Final Expiration Date"), unless the Final Expiration Date is extended or
unless the Rights are earlier redeemed or exchanged by the Company, in each
case, as described below.
In the event that a person or group of affiliated persons
becomes an Acquiring Person, each holder of a Right (the "Flip-In Right")
shall thereafter have the right to receive, upon exercise, the number of
shares of Common Stock or of one-one-hundredths of a share of Preferred
Stock (or, in certain circumstances, cash, property or other securities of
the Company) having a value equal to two times the Purchase Price.
Notwithstanding any of the foregoing, following the occurrence of any such
event, all Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring Person (or
any affiliate or associate thereof) will be null and void.
For example, at an exercise price of $80 per Right, each
Right not owned by an Acquiring Person (or by any affiliate or associate
thereof) following an event set forth in the preceding paragraph would
entitle its holder to purchase $160 worth of Common Stock (or other
consideration, as noted above) for $80. Assuming that the Common Stock had
a per share value of $20 at such time, the holder of each valid Right would
be entitled to purchase eight shares of Common Stock for $80.
In the event that, at any time after a person or group of
affiliated persons has become an Acquiring Person, (i) the Company is
acquired in a merger or other business combination transaction or (ii) 50%
or more of the Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which previously have been voided as
set forth above) shall thereafter have the right (the "Flip-Over Right") to
receive, upon exercise, common stock of the acquiring company having a
value equal to two times the Purchase Price. The holder of a Right will
continue to have the Flip-Over Right whether or not such holder exercises
<PAGE> 85
or surrenders the Flip-In Right. The events set forth in this paragraph and
in the second preceding paragraph are referred to as the "Triggering
Events."
The Purchase Price payable, and the number of Units of
Preferred Stock, shares of Common Stock or other securities or property
issuable, upon exercise of the Rights are subject to adjustment from time
to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock, (ii)
if holders of the Preferred Stock are granted certain rights or warrants to
subscribe for Preferred Stock or convertible securities at less than the
current market price of the Preferred Stock, or (iii) upon the distribution
to holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments amount to at least 1%
of the Purchase Price. No fractional Units will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of
the Preferred Stock on the last trading date prior to the date of exercise.
The number of outstanding Rights and the number of Units
issuable upon exercise of each Right are also subject to adjustment in the
event of a stock split of the Common Stock or the Convertible Preferred
Stock or a stock dividend on the Common Stock or the Convertible Preferred
Stock payable in Common Stock or subdivisions, consolidations or
combinations of the Common Stock or the Convertible Preferred Stock
occurring, in any such case, prior to the Distribution Date.
Shares of the Preferred Stock purchasable upon exercise
of the Rights are not redeemable. Each share of Preferred Stock will
entitle its holder to dividends as, when and if declared by the Board of
Directors of $1 per share per quarter but will be entitled to an aggregate
dividend of 100 times the dividend declared on a share of Common Stock. In
the event of liquidation, the holders of the Preferred Stock will be
entitled to a minimum preferential liquidation payment of $100 per share,
plus accrued and unpaid dividends, but will be entitled to an aggregate
payment of 100 times the payment made per share of Common Stock. Each share
of Preferred Stock will have 100 votes, voting together with the Common
Stock and Convertible Preferred Stock. Finally, in the event of any merger,
consolidation or other transaction in which the Common Stock is exchanged,
each share of the Preferred Stock will be entitled to receive 100 times the
amount received per share of the Common Stock. These rights are protected
by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-hundredth interest
in a share of Preferred Stock purchasable upon exercise of each Right
should approximate the value of one share of Common Stock.
<PAGE> 86
The shares of the Preferred Stock shall rank, with
respect to the payment of dividends and as to the distribution of assets
upon liquidation, dissolution or winding up of the Company, junior to all
other series of preferred stock of the Company, including, without
limitation, the Convertible Preferred Stock, unless the Board of Directors
shall specifically determine otherwise in fixing the powers, preferences
and relative, participating, optional and other special rights of the
shares of any such other series in the qualifications, limitations and
restrictions thereof.
At any time after any person or group of affiliated or
associated persons becomes an Acquiring Person and prior to the acquisition
by such person or group of beneficial ownership of 50% or more of the
outstanding Common Stock, the Board of Directors may exchange the Rights
(other than Rights owned by the Acquiring Person which will have become
void), in whole or in part, at an exchange ratio of one share of Common
Stock or one Unit (or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and privileges) per
Right (subject to adjustment).
At any time prior to such time as any person or group of
affiliated or associated persons becomes an Acquiring Person, the Company
may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price") (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately
upon the action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While it is expected
that the distribution of the Rights will not be taxable to stockholders or
to the Company, stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become exercisable
for Common Stock (or other consideration) of the Company or for common
stock of the acquiring company as set forth above.
The terms of the Rights may be amended by the Board of
Directors without the consent of the holders of Rights, except that from
and after such time as any person or group of affiliated or associated
persons becomes an Acquiring Person, no such amendment may adversely affect
the interests of the holders of Rights.
As of October 31, 1996, there were 11,448,205 shares of
Common Stock and 122,863 shares of Convertible Preferred Stock outstanding,
122,863 shares of Common Stock issuable upon conversion of the shares of
Convertible Preferred Stock, 2,253,521 shares of Common Stock issuable upon
conversion of the Company's Convertible Subordinated Debentures due 2005,
1,884,773 shares of Common Stock issuable upon exercise of the Company's
Class B Warrants and 537,500 shares issuable upon exercise of stock
options. At such time, no shares of Common Stock were held in the Company's
treasury. Each outstanding share of Common Stock and Convertible Preferred
<PAGE> 87
Stock on the Record Date will receive one Right. As long as the Rights are
attached to shares of Stock, the Company will issue one Right for each
share which becomes outstanding between the Record Date and the
Distribution Date so that all shares will have attached Rights and, in
certain cases described in the Rights Agreement, the Company may issue one
Right for each share which becomes outstanding after the Distribution Date.
The Board of Directors has reserved for issuance upon exercise of the
Rights 500,000 shares of Preferred Stock.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that attempts to
acquire the Company in a manner or on terms not approved by the Board of
Directors unless the offer is conditional on a substantial number of Rights
being acquired. The Rights, however, should not affect any prospective
offeror willing to make an offer at a fair price and otherwise in the best
interests of the Company and its stockholders as determined by the Board of
Directors or willing to negotiate with the Board of Directors. The Rights
should not interfere with any merger or other business combination approved
by the Board of Directors since the Board of Directors may, at its option,
at any time until a person or group of affiliated persons becomes an
Acquiring Person, redeem all but not less than all the then outstanding
Rights at the Redemption Price.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to the Company's
Registration Statement on Form 8-A, dated November 7, 1996. A copy of the
Rights Agreement is available free of charge from the Rights Agent. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
<PAGE> 88
EXHIBIT 10
THIRD AMENDMENT TO CREDIT AGREEMENT
THIRD AMENDMENT TO CREDIT AGREEMENT ("Amendment"), dated
as of November 4, 1996, among U.S. HOME CORPORATION, a Delaware corporation
(the "Borrower"), the Lenders that are parties to the Credit Agreement (as
hereinafter defined) and THE FIRST NATIONAL BANK OF CHICAGO, as Agent (the
"Agent").
RECITALS:
A. The Borrower, the Lenders and the Agent have
previously entered into that certain Credit Agreement, dated as of
September 29, 1995, that certain Consent and First Amendment to Credit
Agreement, dated as of February 9, 1996, and that certain Second Amendment
to Credit Agreement, dated as of September 25, 1996 (such Credit
Agreement, as so amended, being herein referred to as the "Credit
Agreement").
B. The parties hereto desire to amend the Credit
Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, the parties hereto, intending to be
legally bound, agree as follows:
1. DEFINITIONS
1.1 In addition to the terms defined herein,
capitalized terms used in this Amendment shall have the respective meanings
ascribed thereto in the Credit Agreement.
2. AMENDMENT OF SECTION 7.2
2.1 Section 7.2 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
"7.2. Use of Proceeds. Subject to the provisions of this
Agreement, the Borrower will use the proceeds of the Advances for
general corporate purposes (including payment of reimbursement
obligations with respect to Facility Letters of Credit), and to
repay outstanding Advances and to engage in the transactions
otherwise permitted by this Agreement. Except as permitted by
Sections 8.6, 8.9 and 8.11 and otherwise permitted by this
Agreement, the Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Advances to
purchase or carry any "margin stock" (as defined in Regulation U)
or, except as otherwise permitted by this Agreement, to purchase
any securities in any transaction that is subject to Sections 13
and 14 of the Securities Exchange Act of 1934, as amended. The
<PAGE> 89
Borrower will not permit any Non-Borrowing Subsidiaries to
receive, whether by loan or other Investment, or otherwise to use
any proceeds of, any Advance if the effect thereof would be to
increase the Investments of the Borrower or any Guarantor in any
Non-Borrowing Subsidiaries to an amount (in the aggregate) in
excess of such Investments as of August 31, 1995; provided that
the Borrower and the Guarantors may (i) make advances or loans to
or other Investments in Non-Borrowing Subsidiaries in an amount
not to exceed the aggregate amount of all advances, loans or
other Investments made by the Non-Borrowing Subsidiaries to the
Borrower after August 31, 1995 which have not been repaid to such
Non-Borrowing Subsidiaries and (ii) make Investments in the
Non-Borrowing Subsidiaries permitted under Section 8.6." 3.
AMENDMENT OF SECTION 8.1
3.1 Section 8.1 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
"8.1. Dividends. The Borrower will not, nor will it permit any
Significant Guarantor to, declare or pay any dividends on its
capital stock (other than dividends payable in (a) its own
capital stock or (b) rights to acquire its own capital stock or
the capital stock of another Person), except that any Significant
Guarantor may declare and pay dividends to the Borrower or to a
Wholly-Owned Subsidiary."
4. AMENDMENT OF SECTION 8.6
4.1 Clause (xv) of Section 8.6 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
"(xv) The purchase, repurchase, repayment, prepayment,
redemption or other acquisition of (i) any of the Borrower's
capital stock and Convertible Subordinated Notes involving
expenditures (from and after the date hereof) not to exceed
$20,000,000 in the aggregate and as otherwise permitted
under Sections 8.9 and 8.11 hereof and (ii) rights issued by
the Borrower under a rights plan (the "Rights Plan");
provided, that, the redemption price per right to be
redeemed shall not exceed $.01."
5. AMENDMENT OF SECTION 8.9
5.1 Section 8.9 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
"8.9 Redemption. The Borrower will not purchase or
redeem any of its capital stock heretofore or hereafter
issued, except that the Borrower may (x) purchase or
redeem its capital stock (i) to the extent that the
consideration for such redemption or purchase is
limited to capital stock of the Borrower or (ii) if the
<PAGE> 90
consideration for such purchase or redemption (A) is
other than capital stock of the Borrower and (B) does
not exceed, in the aggregate for all such purchases and
redemptions, and all purchases, repurchases,
repayments, prepayments, redemptions or other
acquisitions of the Convertible Subordinated Notes,
from and after the date hereof, $20,000,000 and (y)
purchase or redeem the rights issued under the Rights
Plan."
6. AMENDMENT OF SECTION 8.11
6.1 Section 8.11 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
8.11. Subordinated Indebtedness. The Borrower will
not, nor will it permit any Significant Guarantor to,
make any amendment or modification to the subordination
provisions of any indenture, note or other agreement
evidencing or governing any Subordinated Indebtedness,
or directly or indirectly voluntarily prepay, defease
or in substance defease, purchase, redeem, retire or
otherwise acquire, any Subordinated Indebtedness;
provided, however, that the foregoing shall not
prohibit (i) the conversion of the Convertible
Subordinated Notes in accordance with the Indenture
dated as of November 3, 1993 or an amendment permitting
such conversion at a lower conversion price than is
therein provided, (ii) the repayment or prepayment of
Subordinated Indebtedness solely from the net proceeds
of other Subordinated Indebtedness or from capital
stock or (iii) the purchase, repurchase, repayment,
prepayment, redemption or other acquisition of the
Borrower's capital stock and Convertible Subordinated
Notes involving expenditures (from and after the date
hereof) not to exceed $20,000,000 in the aggregate.
7. ADDITIONAL REQUIREMENTS
On or before the execution and delivery of this Amendment,
the Borrower shall:
7.1 deliver to the Agent the Consent of the Guarantors
in the form attached to this Amendment;
7.2 deliver to the Agent the favorable opinion of the
Borrower's counsel, Kaye, Scholer, Fierman, Hays & Handler, LLP,
substantially in the form of Exhibit "A" to this Amendment.
<PAGE> 91
8. MISCELLANEOUS
8.1 This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one agreement,
and any of the parties hereto may execute this Amendment by signing any
such counterpart.
8.2 In all respects, including all matters of
construction, validity and performance, this Amendment shall be construed
in accordance with the internal laws (and not the laws of conflicts) of
the State of Illinois, but giving effect to federal laws applicable to
national banks.
IN WITNESS WHEREOF, this Amendment has been duly executed
as of the date first above written.
U.S. HOME CORPORATION
By: /s/ Thomas A. Napoli
--------------------------
Thomas A. Napoli
Vice President - Finance and Chief
Financial Officer
LENDERS:
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Agent
By: /s/ James D. Benko
--------------------------
Name: James D. Benko
Title: Assistant Vice President
GUARANTY FEDERAL BANK, F.S.B.
By: /s/ Richard V. Thompson
----------------------------
Name: Richard V. Thompson
Title: Vice President
<PAGE> 92
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Robert Ivosevich
-------------------------
Name: Robert Ivosevich
Title: Senior Vice President
BANK ONE, ARIZONA, NA
By: /s/ Rhonda R. Williams
----------------------------
Name: Rhonda R. Williams
Title: Vice President
COMERICA BANK, a Michigan corporation
By: /s/ David J. Campbell
---------------------------------
Name: David J. Campbell
Title: Vice President
<PAGE> 93
CONSENT OF GUARANTORS
The undersigned, being the Guarantors under the
above-referenced Credit Agreement, do hereby consent to the foregoing
Third Amendment to Credit Agreement.
CANTERBURY CORPORATION
By: /s/ Thomas A. Napoli
---------------------------
Thomas A. Napoli
Vice President
COUNTRYPLACE GOLF COURSE, INC.
By: /s/ Thomas A. Napoli
----------------------------
Thomas A. Napoli
Vice President
HOMECRAFT CORPORATION
By: /s/ Thomas A. Napoli
------------------------------
Thomas A. Napoli
Vice President
IMPERIAL HOMES CORPORATION
By: /s/ Thomas A. Napoli
------------------------------
Thomas A. Napoli
Vice President
LODGE HOLDINGS CORP.
By: /s/ Thomas A. Napoli
------------------------------
Thomas A. Napoli
Vice President
<PAGE> 94
OCEANPOINTE DEVELOPMENT CORPORATION
By: /s/ Thomas A. Napoli
-------------------------------
Thomas A. Napoli
Vice President
ORRIN THOMPSON CONSTRUCTION COMPANY
By: /s/ Thomas A. Napoli
------------------------------
Thomas A. Napoli
Vice President
ORRIN THOMPSON HOMES CORP.
By: /s/ Thomas A. Napoli
------------------------------
Thomas A. Napoli
Vice President
PAPARONE CONSTRUCTION CO.
By: /s/ Thomas A. Napoli
--------------------------------
Thomas A. Napoli
Vice President
RUTENBERG HOMES, INC. (FLORIDA)
By: /s/ Thomas A. Napoli
--------------------------------
Thomas A. Napoli
Vice President
RUTENBERG HOMES, INC. (TEXAS)
By: /s/ Thomas A. Napoli
---------------------------------
Thomas A. Napoli
Vice President
<PAGE> 95
STONEY CORPORATION
By: /s/ Thomas A. Napoli
------------------------------------
Thomas A. Napoli
Vice President
USH CAPITAL CORPORATION
By: /s/ Thomas A. Napoli
-----------------------------------
Thomas A. Napoli
Vice President
USH CROSSCREEK, INC.
By: /s/ Thomas A. Napoli
-------------------------------------
Thomas A. Napoli
Vice President
USH EQUITY CORPORATION
By: /s/ Thomas A. Napoli
-----------------------------------
Thomas A. Napoli
Vice President
U.S. HOME CORPORATION OF NEW YORK
By: /s/ Thomas A. Napoli
----------------------------------
Thomas A. Napoli
Vice President
U.S. HOME OF ARIZONA CONSTRUCTION CO.
By: /s/ Thomas A. Napoli
--------------------------------
Thomas A. Napoli
Vice President
<PAGE> 96
U.S. HOME OF COLORADO REAL ESTATE, INC.
By: /s/ Thomas A. Napoli
-----------------------------------
Thomas A. Napoli
Vice President
U.S. HOME REALTY CORPORATION
By: /s/ Thomas A. Napoli
------------------------------------
Thomas A. Napoli
Vice President
U.S. HOME REALTY, INC. (MARYLAND)
By: /s/ Thomas A. Napoli
-----------------------------------
Thomas A. Napoli
Vice President
U.S. HOME REALTY, INC. (TEXAS)
By: /s/ Thomas A. Napoli
-----------------------------------
Thomas A. Napoli
Vice President
U.S. HOME AND DEVELOPMENT CORPORATION
By: /s/ Thomas A. Napoli
-----------------------------------
Thomas A. Napoli
Vice President
U.S.H. CORPORATION OF NEW YORK
By: /s/ Thomas A. Napoli
---------------------------------
Thomas A. Napoli
Vice President
<PAGE> 97
U.S.H. LOS PRADOS, INC.
By: /s/ Thomas A. Napoli
---------------------------------
Thomas A. Napoli
Vice President
<PAGE> 98
Exhibit A
[Kaye, Scholer, Fierman, Hays & Handler, LLP]
__________ __, 1996
The First National Bank of Chicago,
as Agent
One First National Plaza
Chicago, Illinois 60670
Ladies and Gentlemen:
We have acted as counsel to U.S. Home Corporation, a Delaware
corporation (the "Borrower"), in connection with the preparation, execution
and delivery of the Third Amendment to Credit Agreement, dated as of
__________ __, 1996 (the "Third Amendment"), among the Borrower, the
lenders named therein and you, as agent (the "Agent"). Capitalized terms
used but not defined herein have the meanings set forth in the Credit
Agreement, dated as of September 29, 1995, among the Borrower, certain
lenders and the Agent, as amended from time to time.
We have examined such documents, instruments, records and certificates
of public officials and officers of the Borrower, and have reviewed such
questions of law, as we have deemed necessary or appropriate as a basis for
the opinion set forth below. As to any facts material to our opinion, we
have relied upon such documents, instruments, certificates and records.
Based on the foregoing, and subject to the limitations, qualifications
and exceptions set forth herein, in our opinion, the Third Amendment has
been duly authorized, executed and delivered by the Borrower.
The opinion set forth above is subject to the following assumptions
and qualifications:
We have assumed the Borrower is a corporation validly existing and in
good standing under the laws of Delaware. We have also assumed the
genuineness of all signatures, other than those of officers of the
Borrower, the authenticity of all documents submitted to us as originals,
and the conformity with the original documents of all documents submitted
to us as reproduced copies, and the authenticity of all such latter
documents.
Our opinion is limited to the Delaware General Corporation Law.
Our opinion is rendered solely for your information in connection with
the foregoing, and may not be relied upon by any other person or for any
other purpose without our prior written consent.
Very truly yours,
<PAGE> 99
EXHIBIT 99
96-11 Kelly F. Somoza
Vice President
(713) 877-2391
http://www.ushome.com
November 8, 1996
U.S. HOME CORPORATION ADOPTS STOCKHOLDERS RIGHTS PLAN
Houston, Texas, November 8, 1996 - U.S. Home Corporation
(NYSE - UH), announced that its Board of Directors, at a regularly
scheduled meeting, adopted a Stockholders Rights Plan to assure
shareholders fair value and equal treatment in the event of any proposed
takeover of the Company. The Company added that the Plan was not adopted in
response to any attempt to acquire the Company and that it is not aware of
any such effort.
Robert J. Strudler, Chairman of the Board and Co-Chief
Executive Officer, stated "the Rights Plan does not, nor is it intended to,
prevent a takeover, but rather is a measure to encourage anyone seeking to
acquire the Company to negotiate with the Board, thus ensuring fair and
equal treatment of all stockholders."
The Plan established a non-taxable dividend distribution
of one preferred stock purchase right (with an exercise price of $80),
which becomes exercisable upon the occurrence of certain events, on each
share of Common Stock and each share of Convertible Preferred Stock of the
Company held of record as of the close of business on December 4, 1996. The
Rights will expire on November 7, 2006. A summary of the Stockholder Rights
Plan will be mailed to all of the Company's stockholders.
The Rights are redeemable by the Board of Directors at
$.01 per Right at any time until a person or group (other than an
institutional stockholder) acquires 15% or more of the Company's Common
Stock, or an institutional stockholder acquires 20% or more of the Common
Stock.
The name U.S. Home Corporation in housing is synonymous
with quality. Since its organization in 1954, U.S. Home has been one of the
leading home builders in the United States, delivering more than 264,000
homes. For more than two decades, the Company has been among the nation's
ten largest single-family home builders. Today, U.S. Home builds and sells
homes for the affordable, move-up and retirement and active adult home
buyer in more than 200 communities in 32 metropolitan areas in 12 states.
